An intact basement membrane is essential for the proper function, differentiation and morphology of many epithelial cells. The disruption or remodeling of the basement membrane occurs during normal development as well as in the disease state. To examine the importance of basement membrane during development in vivo, we altered the matrix metalloproteinase and tissue inhibitor of metalloproteinases balance in mammary gland. Inhibition of matrix metalloproteinase synthesis by glucocorticoids or implants or transgenic overexpression of tissue inhibitor of metalloproteinases -1 delays matrix degradation and the involution process after weaning. The mammary glands from transgenic mice that inappropriately express auto-activating isoforms of stromelysin-1 are both functionally and morphologically altered throughout development. Transgenic mammary glands have supernumerary branches, and show precocious development of alveoli that express beta-casein expression and undergo unscheduled apoptosis during pregnancy. This is accompanied by progressive development of an altered stroma, which becomes fibrotic after postweaning involution, and by development of neoplasias. These data suggest that metalloproteinases and disruption of the basement membrane may play key roles in branching morphogenesis of mammary gland, cell cycle, apoptosis, and stromal fibrosis as well as in induction and progression of breast cancer.