The phosphatase PTEN regulates growth, adhesion, and apoptosis, among many other cell processes. To investigate its role during mouse mammary gland development, we generated MK-PTEN, a transgenic mouse model in which human PTEN is overexpressed in ductal and alveolar mammary epithelium during puberty, pregnancy, lactation, and involution. No obvious phenotype was observed in mammary tissue of pubescent virgin mice. However, MK-PTEN females could not lactate normally, and approximately 30% of pups died, with survivors exhibiting growth retardation. Transgenic offspring nursed by wild-type foster mothers, conversely, developed normally. This phenotype is consistent with a reduced number of alveolar epithelial cells due to a decrease in cell proliferation and an increase in apoptosis. Using mammary-enriched cDNA microarrays, we identified several genes that were preferentially expressed in MK-PTEN mammary tissue, including the IGF-binding protein-5 (Igfbp5) gene, and others whose expression was reduced, including the genes for c-Jun amino-terminal kinase. Secretory epithelial cell differentiation was impaired, as measured by the expression of specific milk protein genes. MK-PTEN mice also exhibited a 50% decrease in the phosphorylation state of Akt. Taken together, these results suggest that PTEN controls mammary gland development and, consequently, lactation.