Amplified in breast cancer 1 (AIB1; steroid receptor coactivator-3, p/CIP, RAC3, ACTR, TRAM-1, or NCoA-3) is a transcriptional coactivator for nuclear receptors and certain other transcription factors and is a newly defined oncogene overexpressed in human breast cancer. Although the role and molecular mechanism of AIB1 in normal physiology and in breast cancer are currently under intensive investigation, the role of AIB1 in determination of the susceptibility of mammary gland to chemical carcinogens remains uncharacterized. In this study, we used back-crossed FVB wild-type (WT) and AIB1 mutant mice to assess the role of AIB1 in mammary gland development and in carcinogen-induced tumorigenesis. We show that mammary ductal growth was delayed in AIB1-/- mice with FVB strain background, and mammary ductal outgrowths emanating from the AIB1-/- mammary epithelial transplants in WT mice also were attenuated, indicating that the role of AIB1 in mammary ductal growth is a mammary epithelial autonomous function. In mice treated with the chemical carcinogen 7,12-dimethylbenz[a]anthracene (DMBA), AIB1 deficiency protected the mammary gland, but not the skin, from tumorigenesis. AIB1 deficiency suppressed the up-regulation of the insulin receptor substrate (IRS)-1 and IRS-2 and thereby inhibited the activation of Akt, expression of cyclin D1, and cell proliferation. The suppression of these components for insulin-like growth factor-I signaling might be partially responsible for the decreased DMBA-induced mammary tumor initiation and progression in AIB1-/- mice. Our results suggest that AIB1 may serve as a potential target for prevention of carcinogen-induced breast cancer initiation and for treatment of breast cancer progression.