The cytokine-inducible src homology 2 (SH-2) proteins, CIS (cytokine inducible SH-2 domain protein) and SOCS3 (suppressor of cytokine signaling 3), are implicated in the negative regulation of prolactin (PRL) receptor-mediated activation of signal transducer and activator of transcription 5 (STAT5). We have studied the expression and function of CIS and SOCS3 proteins in the mouse mammary gland and in HC11 mammary epithelial cells. CIS and SOCS3 were differentially regulated: high expression levels of CIS mRNA were measured during the second half of pregnancy, whereas SOCS3 expression was high during the first 12 d post conceptum. SOCS3 levels increased, whereas CIS levels decreased, in the initial phase of involution. At the beginning of the lactation period both CIS and SOCS3 were high. PRL and epidermal growth factor (EGF) were able to induce CIS and SOCS3, whereas glucocorticoids inhibited their expression in mammary epithelial cells. The effect of EGF was much stronger on SOCS3 than on CIS. Ectopic expression of both SOCS3 and CIS inhibited STAT5 activation. Our data indicate that in the mammary gland CIS and SOCS3 are involved in regulating STAT5 signaling at three different instances: 1) SOCS3 serves as a mediator of the inhibitory EGF effect on PRL-induced STAT5 activation; 2) CIS and SOCS3 play a role as negative feedback inhibitors of PRL action; 3) Inhibition of CIS and SOCS3 expression by glucocorticoids contributes to the positive effect of glucocorticoids on PRL-induced STAT5 activation.