The tissue microenvironment directs stem/progenitor cell behavior. Cancer cells are also influenced by the microenvironment. It has been shown that, when placed into blastocysts, cancer cells respond to embryonic cues and differentiate according to the tissue type encountered during ontological development. Previously, we showed that the mouse mammary gland was capable of redirecting adult mouse testicular and neural stem/progenitor cells toward a mammary epithelial cell fate during gland regeneration. Here, we report that human embryonal carcinoma cells proliferate and produce differentiated mammary epithelial cell progeny when mixed with mouse mammary epithelial cells and inoculated into the epithelium-free mammary fat pads of athymic nude mice. Fluorescence in situ hybridization confirmed the presence of human cell progeny in the mammary outgrowths for human centromeric DNA, as well as immunochemistry for human-specific breast epithelial cytokeratins and human-specific milk proteins in impregnated transplant hosts. It was found that the number of human cells increased by 66- to 660-fold during mammary epithelial growth and expansion as determined by human cytokeratin expression. All features found in primary outgrowths were recapitulated in the secondary outgrowths from chimeric implants. These results show that human embryonal carcinoma-derived progeny interact with mouse mammary cells during mammary gland regeneration and are directed to differentiate into cells that exhibit diverse mammary epithelial cell phenotypes. This is the first demonstration that human cells are capable of recognizing the signals generated by the mouse mammary gland microenvironment present during gland regeneration in vivo.