Development of the mammary gland (MG) and prostate occurs via mesenchymal-epithelia interactions. Epithelial MG buds are induced in ventral epidermis by mammary mesenchyme, which ultimately specifies the functional expression of the ability to produce milk. Mammary ductal branching is induced by embryonic mammary mesenchyme and is promoted by the mammary fat pad postnatally. These influences of connective tissue on the differentiation of mammary epithelium (ME) begin prenatally, but in adulthood, the connective tissue environment of adult ME profoundly influences epithelial growth, ductal branching, epithelial differentiation, and the ability of adult ME to produce milk. In a similar fashion, prostatic development occurs via mesenchymal-epithelial interactions in which urogenital sinus mesenchyme (UGM) induces epithelial morphogenesis, regulates epithelial proliferation, and evokes the expression of epithelial androgen receptors and prostate-specific secretory proteins. Although prostatic development is induced by androgens, androgenic effects on epithelial development are elicited via androgen receptors of UGM. As in MG, mesenchymal-epithelial interactions in the prostate begin during fetal periods, but continue into adulthood. The responsiveness of adult epithelial cells from various glands to stroma raises the possibility that carcinomas also may be regulated by connective tissue. Indeed, UGM can induce a rat prostatic carcinoma (Dunning tumor) to undergo striking changes in differentiation, which are accompanied by a reduction in growth rate and an apparent loss of tumorigenesis. Although the mechanism of mesenchymal-epithelial interactions remains unknown, the communication between the epithelium and stroma undoubtedly is multifactorial, involving the extracellular matrix, soluble growth or differentiation, and angiogenesis.