Progesterone (P), acting through progesterone receptor (PR) isoforms A and B, plays an important role in normal mammary gland development and is implicated in the etiology of breast cancer. Because of significant similarities between human and rat mammary gland development and hormonal responsiveness of mammary cancers, we investigated P action in the rat mammary gland. By immunohistochemical methods we determined PRA and PRB expression at puberty, sexual maturity, pregnancy, lactation and after postlactational involution, and their functional roles in the regulation of proliferation. PRA expression was restricted to luminal epithelial cells, whereas PRB was expressed in both luminal and myoepithelial cells, indicating a novel role of PRB in myoepithelial cell regulation. The majority of PRA positive (PRA+) cells co-expressed PRB. In the pubertal and adult virgin mammary gland, PRA+PRB+ cells also expressed nuclear cyclin D1, but did not contain the proliferation marker BrdU. Based on a lack of phospho-Rb expression and the expression patterns of the CDK inhibitors p21 and p27 in these cells, we conclude that that PRA+ PRB+ cells appear to be cell cycle arrested and do not proliferate. PRA+ cells were decreased in the adult gland and during and after pregnancy. The percentage of PRB+ cells was relatively constant throughout development and in a significant proportion of cells only PRB was detected. During development, and especially during pregnancy, a high percentage of PRB+ cells were positive for BrdU. From this observation, we conclude that these cells proliferate and that P acting through PRB may directly stimulate proliferation.