Background: PALB2 has been identified as a breast cancer susceptibility gene conferring ~ 2-4 fold increased risk of breast cancer. A number of studies have estimated the PALB2 mutation prevalence to range from 0.5% - 2.9% in populations of breast cancer patients. We performed an analysis to determine the PALB2 mutation prevalence in a large U.S. referral testing population. Methods: DNA samples were anonymized from two subsets of patients: 955 early onset breast cancer patients with severe family history, and 524 patients with later onset of breast cancer and/or less severe family history. All patients were negative for deleterious sequence mutations or large rearrangements in BRCA1 and BRCA2. Results: We identified 10 disease associated PALB2 mutations in the high risk group of 955 patients and 2 deleterious PALB2 mutations in the lower risk group of 524 patients. Identified PALB2 mutations included 8 nonsense, 3 frameshift mutations and a splice site mutation. The mutation prevalence for the high risk population was 1.05% (95% C.I., 0.5 -1.92) whereas that for the lower risk population was 0.38% (95% C.I., 0.05-1.37). The observed rate of PALB2 variants of unknown significance (VUS) identified in this study was ~5% (78 VUS were in 75 of the 1479 patients that were tested). Our variant classification program which successfully decreased the VUS rate in BRCA1 and BRCA2 is similarly expected to enhance mutation classification on an on-going basis for PALB2 genetic testing. Conclusions: Genetic testing for PALB2 may be indicated as a reflex test for breast cancer patients who test negative for BRCA1 and BRCA2.