Most BRCA1-associated breast tumours are basal-like yet originate from luminal progenitors. BRCA1 is best known for its functions in double-strand break repair and resolution of DNA replication stress. However, it is unclear whether loss of these ubiquitously important functions fully explains the cell lineage-specific tumorigenesis. In vitro studies implicate BRCA1 in elimination of R-loops, DNA-RNA hybrid structures involved in transcription and genetic instability. Here we show that R-loops accumulate preferentially in breast luminal epithelial cells, not in basal epithelial or stromal cells, of BRCA1 mutation carriers. Furthermore, R-loops are enriched at the 50 end of those genes with promoter-proximal RNA polymerase II (Pol II) pausing. Genetic ablation of Cobra1, which encodes a Pol II-pausing and BRCA1-binding protein, ameliorates R-loop accumulation and reduces tumorigenesis in Brca1-knockout mouse mammary epithelium. Our studies show that Pol II pausing is an important contributor to BRCA1-associated R-loop accumulation and breast cancer development.