AP-2 transcription factors are key regulators of mouse embryonic development. Aberrant expression of these genes has also been linked to the progression of human breast cancer. Here, we have investigated the role of the AP-2 gene family in the postnatal maturation of the mouse mammary gland. Analysis of AP-2 RNA and protein levels demonstrates that these genes are expressed in the mammary glands of virgin and pregnant mice. Subsequently, AP-2 expression declines during lactation and then is reactivated during involution. The AP-2alpha and AP-2gamma proteins are localized in the ductal epithelium, as well as in the terminal end buds, suggesting that they may influence growth of the ductal network. We have tested this hypothesis by targeting AP-2alpha expression to the mouse mammary gland using the MMTV promoter. Our studies indicate that overexpression of AP-2alpha inhibits mammary gland growth and morphogenesis, and this coincides with a rise in PTHrP expression. Alveolar budding is severely curtailed in transgenic virgin mice, while lobuloalveolar development and functional differentiation are inhibited during pregnancy and lactation, respectively. Our studies strongly support a role for the AP-2 proteins in regulating the proliferation and differentiation of mammary gland epithelial cells in both mouse and human.