Pathogenic variants in BRCA1 or BRCA2 are identified in ∼20% of families with multiple individuals affected by early-onset breast and/or ovarian cancer. Extensive searches for additional highly penetrant genes or alternative mutational mechanisms altering BRCA1 or BRCA2 have not explained the missing heritability. Here, we report a dominantly inherited 5' UTR variant associated with epigenetic BRCA1 silencing due to promoter hypermethylation in two families affected by breast and ovarian cancer. BRCA1 promoter methylation of ten CpG dinucleotides in families who are affected by breast and/or ovarian cancer but do not have germline BRCA1 or BRCA2 pathogenic variants was assessed by pyrosequencing and clonal bisulfite sequencing. RNA and DNA sequencing of BRCA1 from lymphocytes was undertaken to establish allelic expression and the presence of germline variants. BRCA1 promoter hypermethylation was identified in 2 of 49 families in which multiple women are affected by grade 3 breast cancer or high-grade serous ovarian cancer. Soma-wide BRCA1 promoter hypermethylation was confirmed in blood, buccal mucosa, and hair follicles. Pyrosequencing showed that DNA was ∼50% methylated, consistent with the silencing of one allele, which was confirmed by clonal bisulfite sequencing. RNA sequencing revealed the allelic loss of BRCA1 expression in both families and that this loss of expression segregated with the heterozygous variant c.-107A>T in the BRCA1 5' UTR. Our results establish a mechanism whereby familial breast and ovarian cancer is caused by an in cis 5' UTR variant associated with epigenetic silencing of the BRCA1 promoter in two independent families. We propose that methylation analyses be undertaken to establish the frequency of this mechanism in families affected by early-onset breast and/or ovarian cancer without a BRCA1 or BRCA2 pathogenic variant.