A highly conserved CCAAT/enhancer-binding protein (C/EBP)-binding site centered around -134 relative to the transcription start site in the rat beta-casein gene promoter is capable of interacting specifically with recombinant and mammary gland C/EBP proteins. Western blot analysis indicates that C/EBP levels change dramatically throughout mammary gland development. C/EBP alpha expression is barely detectable in mammary glands from virgin and pregnant animals but is expressed at high levels during lactation and at lower levels during involution. The expression of three C/EBP beta isoforms [the liver-enriched activating proteins (LAPs); and the liver-enriched inhibiting protein (LIP)] is elevated throughout pregnancy, with LIP expression increasing more than 100-fold. Thus, during pregnancy, a low LAP/LIP ratio (< 5) is maintained. C/EBP beta expression decreases at parturition, with LIP diminishing to levels observed in the virgin gland. Therefore, during lactation a more than 100-fold increase in the LAP/LIP ratio is observed. Treatment of the HC11 mammary epithelial cell line with hydrocortisone results in a 10- to 20-fold inhibition of LIP expression, with only minor changes in LAP levels. Therefore, glucocorticoids may impinge upon beta-casein gene expression by altering the ratio of the inhibitory to the activating isoforms of C/EBP beta. Several previously defined casein gene promoter regions capable of conferring hormone and extracellular matrix inducibility to reporter genes in mammary cells are suggested to be composite response elements, containing putative binding sites for the same set of hormonally and developmentally regulated factors: C/EBP, MGF/Stat5, and the glucocorticoid receptor.