The epidermal growth factor receptor (EGFR) is overexpressed in about 48% of human breast cancer tissues. To analyse the role of the EGFR in mammary tumor development we generated transgenic mice expressing the human EGFR under the control of either the MMTV-LTR (MHERc) or the beta-lactoglobulin promoter (BLGHERc). The BLGHERc-transgene was expressed exclusively in the female mammary gland, whereas the MHERc transgene was expressed more promiscuously in other organs, such as ovary, salivary gland and testis. Female virgin and lactating transgenic mice of both strains have impaired mammary gland development. Virgin EGFR transgenic mice developed mammary epithelial hyperplasias, whereas in lactating animals progression to dysplasias and tubular adenocarcinomas was observed. In both strains the number of dysplasias increased after multiple pregnancies. The transgene expression pattern was heterogeneous, but generally restricted to regions of impaired mammary gland development. Highest EGFR transgene expression was observed in adenocarcinomas. By using a whole mount organ culture system to study the differentiation potential of the mammary epithelium, we observed a reduced number of fully developed alveoli and a decrease in whey acidic protein expression. Taken together, EGFR overexpression results in a dramatic effect of impaired mammary gland development in vitro as well as in vivo, reducing the differentiation potential of the mammary epithelium and inducing epithelial cell transformation.