Deletion of the transcription factor CCAAT/enhancer binding protein (C/EBP)beta results in a severe inhibition of lobuloalveolar development in the mouse mammary gland. Because progesterone receptor (PR) is requisite for alveolar development, the expression of PR was investigated in C/EBPbeta-/- mice. Unexpectedly, the number of PR-positive cells, as well as the levels of PR mRNA, were elevated 3-fold in the mammary glands of C/EBPbeta-/- mice. Furthermore, in contrast to wild-type nulliparous mice, in which PR distribution shifted from a uniform to nonuniform pattern between 8-12 weeks of age, C/EBPbeta-/- mice exhibited uniform PR distribution throughout all stages of mammary development analyzed. No change in C/EBPbeta mRNA levels was observed in the mammary glands of PR-/- mice, suggesting that PR acts in a pathway either in parallel to or downstream of C/EBPbeta. The overexpression and disrupted cellular distribution of PR in C/EBPbeta-/- mice were coincident with a striking 10-fold decrease in cell proliferation after acute steroid hormone treatment, assayed by incorporation of bromodeoxyuridine. In wild-type mice, PR and bromodeoxyuridine-positive cells were adjacent to each other and rarely colocalized. No differences in the level or pattern of PR expression were observed in the uterus, suggesting that C/EBPbeta influences PR in a mammary-specific fashion. Together, these data suggest that C/EBPbeta may control cell fate decisions in the mammary gland through the appropriate temporal and spatial expression of molecular markers, such as PR, that induce the proliferation of alveolar progenitor cells via juxtacrine mechanisms.