Transforming growth factor (TGF)-beta1 is a potent inhibitor of mammary epithelial proliferation. In human breast, estrogen receptor (ER)-alpha cells rarely co-localize with markers of proliferation, but their increased frequency correlates with breast cancer risk. To determine whether TGF-beta1 is necessary for the quiescence of ER-alpha-positive populations, we examined mouse mammary epithelial glands at estrus. Approximately 35% of epithelial cells showed TGF-beta1 activation, which co-localized with nuclear receptor-phosphorylated Smad 2/3, indicating that TGF-beta signaling is autocrine. Nuclear Smad co-localized with nuclear ER-alpha. To test whether TGF-beta inhibits proliferation, we examined genetically engineered mice with different levels of TGF-beta1. ER-alpha co-localization with markers of proliferation (ie, Ki-67 or bromodeoxyuridine) at estrus was significantly increased in the mammary glands of Tgf beta1 C57/bl/129SV heterozygote mice. This relationship was maintained after pregnancy but was absent at puberty. Conversely, mammary epithelial expression of constitutively active TGF-beta1 via the MMTV promoter suppressed proliferation of ER-alpha-positive cells. Thus, TGF-beta1 activation functionally restrains ER-alpha-positive cells from proliferating in adult mammary gland. Accordingly, we propose that TGF-beta1 dysregulation may promote proliferation of ER-alpha-positive cells associated with breast cancer risk in humans.