The steroid hormones, estrogen and progesterone, are required for mammary epithelial cell proliferation and alveolar morphogenesis in vivo. We have developed a minimally supplemented, serum-free medium, collagen gel primary mammary culture system to determine the mechanism of progestin-induced proliferation and alveolar morphogenesis. In epithelial cells cultured alone, treatment with progestin (R5020) alone produced a lumen within the epithelial organoids, but did not stimulate epithelial cell proliferation. The formation of lumens was associated with increased apoptosis, targeted within the organoids. We have previously reported that in our culture system hepatocyte growth factor (HGF) increases epithelial cell proliferation and induces a tubulo-ductal morphological response. In the present report we show that treatment with HGF and progestin (R5020) further increases epithelial proliferation above that with HGF alone and also produces an alveolar-like morphology similar to that observed in vivo in response to progestin treatment. To the best of our knowledge this is the first in vitro demonstration of both progestin-induced proliferation and alveolar-like morphogenesis of normal nonpregnant mouse mammary epithelial cells in vitro. These results suggest that HGF may play a crucial role in progestin-induced proliferation and morphogenesis in vivo.