Transforming growth factor-beta 1 (TGF-beta 1) possesses highly potent, diverse and often opposing cell-specific activities, and has been implicated in the regulation of a variety of physiologic and developmental processes. To determine the effects of in vivo overexpression of TGF-beta 1 on mammary gland function, transgenic mice were generated harboring a fusion gene consisting of the porcine TGF-beta 1 cDNA placed under the control of regulatory elements of the pregnancy-responsive mouse whey-acidic protein (WAP) gene. Females from two of four transgenic lines were unable to lactate due to inhibition of the formation of lobuloalveolar structures and suppression of production of endogenous milk protein. In contrast, ductal development of the mammary glands was not overtly impaired. There was a complete concordance in transgenic mice between manifestation of the lactation-deficient phenotype and expression of RNA from the WAP/TGF-beta 1 transgene, which was present at low levels in the virgin gland, but was greatly induced at mid-pregnancy. TGF-beta 1 was localized to numerous alveoli and to the periductal extracellular matrix in the mammary gland of transgenic females late in pregnancy by immunohistochemical analysis. Glands reconstituted from cultured transgenic mammary epithelial cells duplicated the inhibition of lobuloalveolar development observed in situ in the mammary glands of pregnant transgenic mice. Results from this transgenic model strongly support the hypothesis that TGF-beta 1 plays an important in vivo role in regulating the development and function of the mammary gland.