Abstract Introduction A gene expression signature indicative of activated wound responses is common to more than 90% of non-neoplastic tissues adjacent to breast cancer, but these tissues also exhibit substantial heterogeneity. We hypothesized that gene expression subtypes of breast cancer microenvironment can be defined and that these microenvironment subtypes have clinical relevance. Methods Gene expression was evaluated in 72 patient-derived breast tissue samples adjacent to invasive breast cancer or ductal carcinoma in situ. Unsupervised clustering identified two distinct gene expression subgroups that differed in expression of genes involved in activation of fibrosis, cellular movement, cell adhesion and cell-cell contact. We evaluated the prognostic relevance of extratumoral subtype (comparing the Active group, defined by high expression of fibrosis and cellular movement genes, to the Inactive group, defined by high expression of claudins and other cellular adhesion and cell-cell contact genes) using clinical data. To establish the biological characteristics of these subtypes, gene expression profiles were compared against published and novel tumor and tumor stroma-derived signatures (Twist-related protein 1 (TWIST1) overexpression, transforming growth factor beta (TGF-β)-induced fibroblast activation, breast fibrosis, claudin-low tumor subtype and estrogen response). Histological and immunohistochemical analyses of tissues representing each microenvironment subtype were performed to evaluate protein expression and compositional differences between microenvironment subtypes. Results Extratumoral Active versus Inactive subtypes were not significantly associated with overall survival among all patients (hazard ratio (HR) = 1.4, 95% CI 0.6 to 2.8, P = 0.337), but there was a strong association with overall survival among estrogen receptor (ER) positive patients (HR = 2.5, 95% CI 0.9 to 6.7, P = 0.062) and hormone-treated patients (HR = 2.6, 95% CI 1.0 to 7.0, P = 0.045). The Active subtype of breast microenvironment is correlated with TWIST-overexpression signatures and shares features of claudin-low breast cancers. The Active subtype was also associated with expression of TGF-β induced fibroblast activation signatures, but there was no significant association between Active/Inactive microenvironment and desmoid type fibrosis or estrogen response gene expression signatures. Consistent with the RNA expression profiles, Active cancer-adjacent tissues exhibited higher density of TWIST nuclear staining, predominantly in epithelium, and no evidence of increased fibrosis. Conclusions These results document the presence of two distinct subtypes of microenvironment, with Active versus Inactive cancer-adjacent extratumoral microenvironment influencing the aggressiveness and outcome of ER-positive human breast cancers.