Cancer dormancy followed by recurrence remains an enigma in cancer biology. Since both local and systemic recurrences are thought to emanate from dormant micrometastasis which take origin from lymphovascular tumor emboli we wondered whether the process of dormancy might initiate within lymphovascular emboli. This study combines experimental studies with a patient-derived xenograft (PDX) of inflammatory breast cancer (Mary-X) that spontaneously forms spheroids in vitro and budding lymphovascular tumor emboli in vivo with observational studies utilizing tissue microarrays (TMAs) of human breast cancers. In the experimental studies, Mary-X during both lymphovascular emboli formation in vivo and spheroidgenesis in vitro exhibited decreased proliferation, a G0/G1 cell cycle arrest and decreased mTOR signaling. This induction of dormancy required calpain-mediated E-cadherin proteolysis and was mediated by decreased P13K signaling, resulting in decreased mTOR activity. In observational human breast cancer studies, increased E-cadherin immunoreactivity due to increased E-cad/NTF-1 but both decreased Ki-67 and mTOR activity was observed selectively and differentially within the lymphovascular tumor emboli. Both our experimental as well as observational studies indicate that in vivo lymphovascular tumor emboli and their in vitro spheroid equivalent initiate dormancy through these pathways.