Prolactin (PRL) is one of several polypeptide factors known to exert trophic effects on the prostate. We have previously reported a dramatic prostate enlargement with concurrent chronic hyperprolactinemia and elevated serum androgen levels in a PRL transgenic mouse (Mt-PRL) with ubiquitous expression of the transgene. To address the role of local PRL action in the prostate, a new transgenic mouse model (Pb-PRL) was generated using the prostate-specific rat probasin (Pb) minimal promoter to drive expression of the rat PRL gene. Pb-PRL transgenic males developed a significant enlargement of both the dorsolateral and ventral prostate lobes evident from 10 wk of age and increasing with age. Expression of the transgene was restricted to the prostate and detected from 4 wk of age. Low levels of transgenic rat PRL were detectable in the serum of adult Pb-PRL animals. Serum androgen levels were normal. The Pb-PRL prostate displayed significant stromal hyperplasia, ductal dilation, and focal areas of epithelial dysplasia. Quantitative analysis of prostatic tissue cellularity demonstrated a marked increase in the stromal to epithelial ratio in all lobes of Mt-PRL and Pb-PRL transgenic prostates compared with controls. Microdissections demonstrated an increased ductal morphogenesis in dorsolateral and ventral prostate lobes of Mt-PRL prostate vs. Pb-PRL and controls. In conclusion, this study indicates the ability of PRL to promote, directly or indirectly, ductal morphogenesis in the developing prostate and further to induce abnormal growth primarily of the stroma in the adult gland in a setting of normal androgen levels.