Mice carrying a germ-line null mutation of the prolactin receptor gene have been produced by gene targeting in embryonic stem cells. Heterozygous females showed almost complete failure of lactation attributable to greatly reduced mammary gland development after their first, but not subsequent, pregnancies. Homozygous females were sterile owing to a complete failure of embryonic implantation. Moreover, they presented multiple reproductive abnormalities, including irregular cycles, reduced fertilization rates, defective preimplantation embryonic development, and lack of pseudopregnancy. Half of the homozygous males were infertile or showed reduced fertility. This work establishes the prolactin receptor as a key regulator of mammalian reproduction, and provides the first total ablation model to further study the role of the prolactin receptor and its ligands.