The role of prolactin in human breast cancer has been controversial. However, it is now apparent that human mammary epithelial cells can synthesize prolactin endogenously, permitting autocrine/paracrine actions within the mammary gland that are independent of pituitary prolactin. To model this local mammary production of prolactin (PRL), we have generated mice that overexpress prolactin within mammary epithelial cells under the control of a hormonally nonresponsive promoter, neu-related lipocalin (NRL). In each of the two examined NRL-PRL transgenic mouse lineages, female virgin mice display mammary developmental abnormalities, mammary intraepithelial neoplasias, and invasive neoplasms. Prolactin increases proliferation in morphologically normal alveoli and ducts, as well as in lesions. The tumors are of varied histotype, but papillary adenocarcinomas and adenosquamous neoplasms predominate. Neoplasms can be separated into two populations: one is estrogen receptor alpha (ERalpha) positive (greater than 15% of the cells stain for ERalpha), and the other is ERalpha- (<3%). ERalpha expression does not correlate with tumor histotype, or proliferative or apoptotic indices. These studies provide a mouse model of hormonally dependent breast cancer, and, perhaps most strikingly, a model in which some neoplasms retain ERalpha, as occurs in the human disease.