E6-associated protein (E6-AP), which was originally identified as an ubiquitin-protein ligase, also functions as a coactivator of estrogen (ER-α) and progesterone (PR) receptors. To investigate the in vivo role of E6-AP in mammary gland development, we generated transgenic mouse lines that either overexpress wild-type (WT) human E6-AP (E6-AP(WT)) or ubiquitin-protein ligase-defective E6-AP (E6-AP(C833S)) in the mammary gland. Here we show that overexpression of E6-AP(WT) results in impaired mammary gland development. In contrast, overexpression of E6-AP(C833S) or loss of E6-AP (E6-AP(KO)) increases lateral branching and alveolus-like protuberances in the mammary gland. We also show that the mammary phenotypes observed in the E6-AP transgenic and knockout mice are due, in large part, to the alteration of PR-B protein levels. We also observed alteration in ER-α protein level, which might contribute to the observed mammary phenotype by regulating PR expression. Furthermore, E6-AP regulates PR-B protein levels via the ubiquitin-proteasome pathway. Additionally, we also show that E6-AP impairs progesterone-induced Wnt-4 expression by decreasing the steady state level of PR-B in both mice and in human breast cancer cells. In conclusion, we present the novel observation that E6-AP controls mammary gland development by regulating PR-B protein turnover via the ubiquitin proteasome pathway. For the first time, we show that the E3-ligase activity rather than the coactivation function of E6-AP plays an important role in the mammary gland development, and the ubiquitin-dependent PR-B degradation is not required for its transactivation functions. This mechanism appears to regulate normal mammogenesis, and dysregulation of this process may be an important contributor to mammary cancer development and progression.