The mammary gland is a hormone-target organ derived from epidermis and develops as a result of reciprocal mesenchymal-epithelial interactions. The induction of mammary differentiation from indifferent epidermal cells by mammary mesenchyme implies induction of the complement of hormone receptors characteristic of normal mammary epithelium in cells of the epidermis. Considering the facts that mammary epithelial differentiation is induced by mammary mesenchyme and that certain aspects of hormone response (androgen-induced mammary regression) are inextricably linked to mesenchymal-epithelial interactions, it is evident that the biology of the mammary gland arises from and is maintained via cell-cell interactions. As a corollary, perturbation of stromal-epithelial interactions in adulthood may play a role in mammary carcinogenesis and in turn may provide opportunities for differentiation therapy.