Breast cancer incidence increases during aging, yet the mechanism of age-associated mammary tumorigenesis is unclear. Mammary stem cells are believed to play an important role in breast tumorigenesis, but how their function changes with age is unknown. We compared mammary epithelial cells isolated from young and old mammary glands of different cohorts of C57BL6/J and BALB/c mice, and our findings revealed that old mammary glands were characterized by increased basal cell pool comprised of mostly CD49fhi cells, altered luminal-to-basal cell ratio, and irregular ductal morphology. More interestingly, basal stem cells in old mice were increased in frequency, but showed a functional decline of differentiation and increased neoplastic transformation potential. Gene signature enrichment analysis revealed a significant enrichment of a luminal cell gene expression signature in the basal stem cell-enriched population from old mice, suggesting some luminal cells were expressing basal markers. Immunofluorescence staining confirmed the presence of luminal cells with high CD49f expression in hyperplastic lesions implicating these cells as undergoing luminal to basal phenotypic changes during aging. Whole transcriptome analysis showed elevated immune and inflammatory responses in old basal stem cells and stromal cells, which may be the underlying cause for increased CD49fhi basal-like cells in aged glands.