PURPOSE: Emerging evidence suggests that metformin may reduce breast cancer incidence, but reports are mixed and few provide information on tumor characteristics. Therefore, we assessed associations among diabetes, metformin use, and breast cancer in postmenopausal women participating in Women's Health Initiative clinical trials. PATIENTS AND METHODS: In all, 68,019 postmenopausal women, including 3,401 with diabetes at study entry, were observed over a mean of 11.8 years with 3,273 invasive breast cancers diagnosed. Diabetes incidence status was collected throughout follow-up, with medication information collected at baseline and years 1, 3, 6, and 9. Breast cancers were confirmed by review of central medical records and pathology reports. Cox proportional hazards regression, adjusted for breast cancer risk factors, compared breast cancer incidence in women with diabetes who were metformin users or nonusers with breast cancer incidence in women without diabetes. RESULTS: Compared with that in women without diabetes, breast cancer incidence in women with diabetes differed by diabetes medication type (P = .04). Women with diabetes receiving medications other than metformin had a slightly higher incidence of breast cancer (hazard ratio [HR], 1.16; 95% CI, 0.93 to 1.45), and women with diabetes who were given metformin had lower breast cancer incidence (HR, 0.75; 95% CI, 0.57 to 0.99). The association was observed for cancers positive for both estrogen receptor and progesterone receptor and those that were negative for human epidermal growth factor receptor 2. CONCLUSION: Metformin use in postmenopausal women with diabetes was associated with lower incidence of invasive breast cancer. These results can inform future studies evaluating metformin use in breast cancer management and prevention.