Patient-derived human-in-mouse xenograft models of breast cancer (PDX models) that exhibit spontaneous lung metastases offer a potentially powerful model of cancer metastasis. In this study, we evaluated the malignant character of lung micro-metastases that emerge in such models after orthotopic implantation of human breast tumor cells into the mouse mammary fat pad. Interestingly, relative to the parental primary breast tumors, the lung metastasis (met)-derived mammary tumors exhibited a slower growth rate and a reduced metastatic potential with a more differentiated epithelial status. Epigenetic correlates were determined by gene array analyses. Lung met-derived tumors displayed differential expression of negative regulators of cell proliferation and metabolism and positive regulators of mammary epithelial differentiation. Clinically, this signature correlated with breast tumor subtypes. We identified microRNA-138 as a novel regulator of invasion and epithelial-mesenchymal transition in breast cancer cells, acting by directly targeting the polycomb epigenetic regulator EZH2. Mechanistic investigations showed that GATA3 transcriptionally controlled miR-138 levels in lung metastases. Notably, the miR-138 activity signature served as a novel independent prognostic marker for patient survival beyond traditional pathologic variables, intrinsic subtypes or a proliferation gene signature. Our results highlight the loss of malignant character in some lung micro-metastatic lesions and the epigenetic regulation of this phenotype