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There is currently no gene expression assay that can assess if premalignant lesions will develop into invasive breast cancer. This study sought to identify biomarkers for selecting patients with a high potential for developing invasive carcinoma in the breast with normal histology, benign lesions, or premalignant lesions. A set of 26-gene mRNA expression profiles were used to identify invasive ductal carcinomas from histologically normal tissue and benign lesions and to select those with a higher potential for future cancer development (ADHC) in the breast associated with atypical ductal hyperplasia (ADH). The expression-defined model achieved an overall accuracy of 94.05% (AUC = 0.96) in classifying invasive ductal carcinomas from histologically normal tissue and benign lesions (n = 185). This gene signature classified cancer development in ADH tissues with an overall accuracy of 100% (n = 8). The mRNA expression patterns of these 26 genes were validated using RT-PCR analyses of independent tissue samples (n = 77) and blood samples (n = 48). The protein expression of PBX2 and RAD52 assessed with immunohistochemistry were prognostic of breast cancer survival outcomes. This signature provided significant prognostic stratification in The Cancer Genome Atlas breast cancer patients (n = 1100), as well as basal-like and luminal A subtypes, and was associated with distinct immune infiltration and activities. The mRNA and protein expression of the 26 genes was associated with sensitivity or resistance to 18 NCCN-recommended drugs for treating breast cancer. Eleven genes had significant proliferative potential in CRISPR-Cas9/RNAi screening. Based on this gene expression signature, the VEGFR inhibitor ZM-306416 was discovered as a new drug for treating breast cancer.