PRL is essential for normal lobulo-alveolar growth of the mammary gland and may contribute to mammary cancer development or progression. However, analysis of the mechanism of action of PRL in these processes is complicated by the production of PRL within mammary epithelia. To examine PRL actions in a mammary cell-specific context, we selected MCF-7 cells that lacked endogenous PRL synthesis, using PRL stimulation of interferon-gamma-activated sequence-related PRL response elements. Derived clones exhibited a greater proliferative response to PRL than control cells. To understand the mechanism, we examined, by Western analysis, levels of proteins essential for cell cycle progression as well as phosphorylation of retinoblastoma protein. The expression of cyclin D1, a critical regulator of the G1/S transition, was significantly increased by PRL and was associated with hyperphosphorylation of retinoblastoma protein at Ser(780). Cyclin B1 was also increased by PRL. In contrast, PRL decreased the Cip/Kip family inhibitor, p21, but not p16 or p27. These studies demonstrate that PRL can stimulate the cell cycle in mammary epithelia and identify specific targets in this process. This model system will enable further molecular dissection of the pathways involved in PRL-induced proliferation, increasing our understanding of this hormone and its interactions with other factors in normal and pathogenic processes.