Stromal-epithelial interactions mediate mammary gland development and the formation and progression of breast cancer. To study these interactions in vitro, the development of defined three-dimensional (3D) models is essential. In the present study, we have successfully developed novel 3D in vitro models that allow the formation of mammary gland structures closely resembling those found in vivo. Cocultures of a human mammary epithelial cell line MCF10A and human mammary fibroblasts obtained from reduction mammoplasties embedded in either a type I collagen or a mixed Matrigel-collagen matrix were carried out for up to 6 weeks. Histological and ultrastructural analysis confirmed the formation of ductal and alveolar structures. The importance of the stromal cells was apparent in both matrices; in the collagen gels the presence of reduction mammoplasty fibroblasts accelerated the initial formation of epithelial structures, and in the mixed Matrigel-collagen gels the presence of those fibroblasts was necessary for the formation of ductal structures. These models provide an excellent system to study tissue organization, epithelial morphogenesis, and breast carcinogenesis.