Prolactin (PRL) regulates the development of the mammary gland at three stages in the reproductive life history of females. The first stage is mammary gland organogenesis, during which PRL contributes to the maturation of the mammary glands from a primary ductal system, which grows from terminal end buds, to the fully mature nonpregnant gland. The mature mammary gland is characterized by an absence of terminal end buds, and the development of a highly branched architecture, which is decorated by lobular buds. During pregnancy PRL, placental lactogens, and progesterone stimulate the expansion and physiological differentiation of the lobuloalveolar system from the lobular buds. After delivery PRL, in the context of falling progesterone, stimulates the final induction of milk protein gene expression and lactation. PRL acts directly on the mammary epithelium, and indirectly by stimulating luteal progesterone secretion in rodents. Disruption of the genes for PRL and the PRL receptor, as well as those for transcription factors important in mammary gland regulation (Stat proteins), have provided a new set of animal models with which to study normal mammary gland development and the relationships of PRL to breast carcinogenesis. Two major deficiencies in our current knowledge of PRL actions are our understanding of the role of epithelial-stromal interactions in PRL-induced mammary morphogenesis, and the identity of developmentally important genes that are regulated by PRL during normal mammary gland organogenesis.