Mammary alveoli are composed of luminal (secretory) and basal (myoepithelial) cells, which are descendants of a common stem cell. This study addressed the role of RBP-J-dependent Notch signaling in the formation, maintenance and cellular composition of alveoli during pregnancy. For this purpose, the genes encoding RBP-J, the shared transcriptional mediator of Notch receptors, and Pofut1, a fucosyltransferase required for the activity of Notch receptors, were deleted in mammary progenitor cells in the mouse using Cre-mediated recombination. Loss of RBP-J and Pofut1 led to an accumulation of basal cell clusters characterized by the presence of cytokeratins (K5) and K14 and smooth muscle actin (SMA) during pregnancy. Hormonal stimulation of mutant tissue induced the expression of the basal cell transcription factor p63 in luminal cells and excessive proliferation of basal cells. A transient enrichment of K6-positive luminal cells was observed upon hormonal treatment suggesting a temporary arrest at an immature stage prior to transdifferentiation and expansion as basal cells. Despite the extensive proliferation of RBP-J-null basal cells during pregnancy, hormonal withdrawal during involution resulted in complete remodeling and the restoration of normal tissue architecture. We propose that the Notch-RBP-J pathway regulates alveolar development during pregnancy by maintaining luminal cell fate and preventing uncontrolled basal cell proliferation.