The use of tissue recombinants in conjunction with steroid receptor deficient mice is described as a tool to dissect the complex paracrine pathways of sex-hormone-regulated epithelial growth and ductal morphogenesis in the mammary gland and other hormone target organs. The basic methodology involves the construction of the four possible tissue recombinants composed of epithelium (E) and stroma (S) from wild-type (wt) and knock-out (KO) mice: wt-S + wt-S, wt-S + KO-E, KO-S + KO-E, and KO-S + wt-E. All tissue recombinants are grown as subrenal capsule grafts in nude mice. Following appropriate hormonal challenge epithelial growth can be studied in the four types of tissue recombinants. Such studies using estrogen receptor, androgen receptor and progesterone receptor knockout mice demonstrate that epithelial steroid receptors are neither necessary nor sufficient for hormonal regulation of epithelial proliferation. Instead, hormonal regulation of epithelial proliferation is a paracrine event mediated by hormone-receptor-positive stromal cells.