APOBEC3 enzymes contribute significantly to DNA mutagenesis in cancer. These enzymes are also capable of converting C bases at specific positions of RNAs to U. However, the prevalence and significance of this C-to-U RNA editing in any cancer is currently unknown. We developed a bioinformatics workflow to determine RNA editing levels at known APOBEC3-mediated RNA editing sites using exome and mRNA sequencing data of 1040 breast cancer tumors. Although reliable editing determinations were limited due to sequencing depth, editing was observed in both tumor and adjacent normal tissues. For 440 sites (411 genes), editing was determinable for ≥5 tumors, with editing occurring in 0.6%–100% of tumors (mean 20%, SD 14%) at an average level of 0.6%–20% (mean 7%, SD 4%). Compared to tumors with low RNA editing, editing-high tumors had enriched expression of immune-related gene sets, and higher T cell and M1 macrophage infiltration, B and T cell receptor diversity, and immune cytolytic activity. Concordant with this, patients with increased RNA editing in tumors had better disease- and progression-free survivals (hazard ratio = 1.67–1.75, p < 0.05). Our study identifies that APOBEC3-mediated RNA editing occurs in breast cancer tumors and is positively associated with elevated immune activity and improved survival.