1. The concentration of iron in mouse milk is approximately 3 times that of the serum. Although there is clear evidence for the presence of the transferrin receptor in the rodent mammary gland, the precise mechanisms of iron transfer into milk are not known. 2. Milk iron was linearly related to the serum iron:transferrin ratio in lactating mice whose serum iron ranged from 8 to 66 microM. 3. Increasing the iron binding capacity of the milk by 340 microM by targeting the lactoferrin transgene to the mammary gland did not alter the relation between milk iron and the serum iron:transferrin ratio. 4. The steady-state distribution ratio of 125I-transferrin between plasma and milk was about 0.2, indicating that transcytosed transferrin contributed a maximum of 6% of the milk iron. 5. Fluorescently labelled transferrin incubated with the in situ gland localized mainly near the basal surface of the mammary alveolar cells. 6. These experiments provide evidence that the initial and rate-limiting step in the transfer of iron into milk is binding to a basal transferrin receptor. 7. A theoretical model of the relation between milk and serum iron suggests that the affinity of apotransferrin for the basal recycling system may be higher than observed in many other cell types.