Elafin is an endogenous serine protease inhibitor. The majority of breast cancer cell lines lack elafin expression compared to human mammary epithelial cells. In this study, we hypothesized that elafin is downregulated during breast and ovarian tumorigenesis. We examined elafin expression by immunohistochemistry (IHC) in specimens of normal breast tissue (n = 24), ductal carcinoma in situ (DCIS) (n = 54), and invasive breast cancer (n = 793). IHC analysis of elafin expression was also performed in normal fallopian tube tissue (n = 20), ovarian cystadenomas (n = 9), borderline ovarian tumors (n = 21), and invasive ovarian carcinomas (n = 216). To understand the significance of elafin in luminal breast cancer cell lines, wild-type or M25G elafin (lacking the protease inhibitory function) were exogenously expressed in MCF-7 and T47D cells. Elafin expression was downregulated in 24% of DCIS and 83% of invasive breast tumors when compared to elafin expression in the normal mammary epithelium. However, the presence of elafin-positive cells in invasive breast tumors, even at low frequency, correlated with poor recurrence-free survival (RFS), reduced overall survival (OS), and clinicopathological markers of aggressive tumor behavior. Elafin-positive cells were an especially strong and independent prognostic marker of reduced RFS in IHC-defined luminal A-like tumors. Elafin was also downregulated in 33% of ovarian cystadenomas, 43% of borderline ovarian tumors, and 86% of invasive ovarian carcinomas when compared to elafin expression in the normal fallopian tube. In ovarian tumors, elafin-positive cells were correlated with reduced RFS, OS and disease-specific survival (DSS) only in stage I/II patients and not in stage III/IV patients. Notably, exogenous expression of elafin or elafin M25G in the luminal breast cancer cell lines MCF-7 and T47D significantly decreased cell proliferation in a protease inhibitory domain-independent manner. Elafin predicts poor outcome in breast and ovarian cancer patients and delineates a subset of endocrine receptor-positive breast cancer patients susceptible to recurrence who could benefit from more aggressive intervention. Our in vitro results suggest that elafin arrests luminal breast cancer cells, perhaps suggesting a role in tumor dormancy.