Genome wide association studies (GWAS) have identified low penetrance and high frequency single nucleotide polymorphisms (SNPs) that contribute to genetic susceptibility of breast cancer. The SNPs at 16q12, close to the TOX3 and CASC16 genes, represent one of the susceptibility loci identified by GWAS, showing strong evidence for breast cancer association across various populations. To examine molecular mechanisms of TOX3 regulation in breast cancer, we investigated both genetic and epigenetic factors using cell lines and datasets derived from primary breast tumors available through The Cancer Genome Atlas (TCGA). TOX3 expression is highly up-regulated in luminal subtype tumors compared to normal breast tissues or basal-like tumors. Expression quantitative trait loci (eQTL) analyses revealed significant associations of rs3803662 and rs4784227 genotypes with TOX3 expression in breast tumors. Bisulfite sequencing of four CpG islands in the TOX3 promoter showed a clear difference between luminal and basal-like cancer cell lines. 5-Aza-2’-deoxycytidine treatment of a basal-like cancer cell line increased expression of TOX3. TCGA dataset verified significantly lower levels of methylation of the promoter in luminal breast tumors with an inverse correlation between methylation and expression of TOX3. Methylation QTL (mQTL) analyses showed a weak or no correlation of rs3803662 or rs4784227 with TOX3 promoter methylation in breast tumors, indicating an independent relationship between the genetic and epigenetic events. These data suggest a complex system of TOX3 regulation in breast tumors, driven by germline variants and somatic epigenetic modifications in a subtype specific manner.