Background: Tumor budding is a histological phenomenon consisting of the formation of small clusters of one to five undifferentiated malignant cells detached from the main tumor mass which are observed in the tumor stroma. In the present study, we investigated the prognostic significance of tumor budding in breast cancer and its relationship with the expressions of matrix metalloproteases (MMPs) and their tissue inhibitors (TIMPs). Methods: The number of buds was counted in whole-tissue sections from 153 patients with invasive ductal carcinomas who underwent a long follow-up period. In addition, an immunohistochemical study of MMP-9, -11, and -14 TIMP-1 and -2 expression by cell types at the invasive tumor front was carried out. Results: There was a wide variability in the number of buds among tumors, ranging from 0 to 28 (median = 5). Tumor budding count ≥ 4 was the optimal cut-off to predict both relapse-free and overall survival. High-grade tumor budding was associated with MMP/TIMP expression by cancer-associated fibroblasts. In addition, we found that the combination of tumor budding grade with MMP/TIMP expression by stromal cells, and especially with MMP-11 expression by mononuclear inflammatory cells, significantly improved the prognostic evaluation. Conclusion: High-grade tumor budding is associated with a more aggressive tumor phenotype, which, combined with MMP/TIMP expression by stromal cells at the invasive front of the tumor, identifies patients with poor prognosis.