To comprehensively characterize microRNA (miRNA) expression in breast cancer, we performed the first extensive next-generation sequencing expression analysis of this disease. We sequenced small RNA from tumors with paired samples of normal and tumor-adjacent breast tissue. Our results indicate that tumor identity is achieved mainly by variation in the expression levels of a common set of miRNAs rather than by tissue-specific expression. We also report 361 new, well-supported miRNA precursors. Nearly two-thirds of these new genes were detected in other human tissues and 49% of the miRNAs were found associated with Ago2 in MCF7 cells. Ten percent of the new miRNAs are located in regions with high-level genomic amplifications in breast cancer. A new miRNA is encoded within the ERBB2/Her2 gene and amplification of this gene leads to overexpression of the new miRNA, indicating that this potent oncogene and important clinical marker may have two different biological functions. In summary, our work substantially expands the number of known miRNAs and highlights the complexity of small RNA expression in breast cancer.