The PRL receptor (PrlR) and the signal transducer and activator of transcription 5a (Stat5a) are essential for the proliferation and differentiation of mammary epithelium during pregnancy. Based on tissue culture cell experiments, Jak2 is the tyrosine kinase responsible for the phosphorylation of both the PrlR and Stat5. We have now used a genetic approach to test the role of Jak2 in the mammary gland, a PrlR-responsive tissue. Because Jak2-null embryos die at E12.5, we transplanted Jak2-null mammary anlagen into cleared fat pads of wild-type mice and investigated epithelial development during pregnancy. In the absence of Jak2, no secretory alveoli were present at parturition, and epithelial cell proliferation was reduced by 95% after an acute hormone treatment. Furthermore, the Na-K-Cl cotransporter, a ductal marker, was maintained in Jak2-null epithelium and the sodium-phosphate cotransporter type IIb, a secretory cell marker, was absent. Nuclear Stat5a was only observed in a few epithelial cells in Jak2-null glands at pregnancy and parturition compared with most epithelial cells in wild-type glands. Taken together, our results demonstrate that Jak2 is a critical tyrosine kinase that conveys intracellular signals necessary for proliferation and differentiation of mammary epithelium during pregnancy.