A plethora of studies have demonstrated that chronic inflammatory microenvironment influences the genesis and progression of tumors. Such microenvironments are enriched with various lipid mediators. Platelet activating factor (PAF, 1-alkyl-2-acetyl-sn-glycero-3-phosphocholine) is one such lipid mediator that is secreted by different immune cell types during inflammation and by breast cancer cells upon stimulation with growth factors. Overexpression of PAF-receptor has also been observed in many other cancers. Here we report the possible roles of PAF in tumor initiation and progression. MCF10A, a non-transformed and non-malignant mammary epithelial cell line, when grown as 3D 'on-top' cultures form spheroids that have a distinct hollow lumen surrounded by a monolayer of epithelial cells. Exposure of these spheroids to PAF resulted in the formation of large deformed acinar structures with disrupted lumen, implying transformation. We then examined the response of transformed cells such as MDA-MB 231 to stimulation with PAF. We observed collective cell migration as well as motility at the single cell level on PAF induction, suggesting its role during metastasis. This increase in collective cell migration is mediated via PI3-kinase and/or JNK pathway and is independent of the MAP-kinase pathway. Taken together this study signifies a novel role of PAF in inducing transformation of non-tumorigenic cells and the vital role in promotion of breast cancer cell migration.