Rare protein-truncating variants (PTVs) in PALB2 confer increased risk to breast cancer, but relatively few studies have reported the characteristics of tumours with PALB2 PTVs. In this study, we describe molecular characteristics of tumours with either germline or somatic alterations in PALB2. DNA from fresh frozen tumour tissues and matched peripheral blood lymphocytes for 560 breast cancer patients was subjected for whole-exome sequencing (WES), and RNA from tumour tissues was subjected to RNA sequencing (RNA-seq). We found six cases with germline and three with somatic protein-truncating variants in PALB2. The characteristics of tumours in patients with PALB2 PTVs were similar to those with BRCA1 and BRCA2 PTVs, having significantly more somatic alterations, and a high proportion of the mutational signature and genomic scar scores characteristic of deficiencies in homologous recombination (HR), compared to tumours arising in non-carriers. Unlike tumours arising in patients with BRCA1 and BRCA2 PTVs, PALB2 tumours did not have high prevalence of TP53 somatic alterations or an enriched immune microenvironment. In summary, PALB2 tumours show the homologous recombination deficiencies characteristic of BRCA1 and BRCA2 tumours, and highlight the potential clinical relevance of PALB2 mutational status in guiding therapeutic choices.