Knockout (KO) mice have been created that carry null mutations of genes encoding molecules essential for prolactin (PRL) release, PRL, the receptor for prolactin (PRLR), and various members of the receptor's signaling pathway. This allowed an in vivo genetic analysis of the role of PRL in target organ function. In PRLKO and PRLRKO mice, mammary ductal side branching was absent, terminal end bud (TEB)-like structures persisted at the ductal termini well into maturity, and no alveolar buds formed along the ductal tree. Transplants of recombined mammary glands formed from stromal and epithelial elements with and without PRLR showed normal development, while supplementation of progesterone levels in PRLKO animals restored ductal side branching. During pregnancy, PRLR heterozygous animals initially showed normal ductal and alveolar development. However, alveolar development stalled during late pregnancy, preventing successful lactation. This defect could be rescued by the loss of a single allele of the suppressor of cytokine signaling (SOCS) 1 gene. Transplants of recombined glands containing PRLRKO epithelium and wild-type (WT) stroma formed alveolar buds during pregnancy but showed no lobuloalveolar development. Recombinations of WT epithelium and PRLRKO stroma showed normal development, demonstrating that a direct action of the lactogenic hormones is confined to the epithelium, to promote lobuloalveolar development. Transcript profiling of epithelial transplants expressing or not expressing PRLR was used during early pregnancy to investigate the transcriptional response to lactogens underlying this defect. Such profiling has identified a number of genes with well-characterized roles in mammary development, in addition to a number of novel transcripts.