The bilayered mammary epithelium comprises a luminal layer of secretory cells and a basal layer of myoepithelial cells. Numerous data suggest the existence of self-renewing, pluripotent mammary stem cells; however, their molecular characteristics and differentiation pathways are largely unknown. BC44 mammary epithelial cells in culture, display phenotypic characteristics of basal epithelium, i.e., express basal cytokeratins 5 and 14 and P-cadherin, but no smooth muscle markers. In vivo, after injection into the cleared mammary fat pad, these cells gave rise to bilayered, hollow, alveolus-like structures comprising basal cells expressing cytokeratin 5 and luminal cells positive for cytokeratin 8 and secreting beta-casein in a polarized manner into the lumen. The persistent stimulation of EGF receptor signaling pathway in BC44 cells in culture resulted in the loss of the in vivo morphogenetic potential and led to the induction of active MMP2, thereby triggering cell scattering and motility on laminin 5. These data (a) suggest that BC44 cells are capable of asymmetric division for self-renewal and the generation of a differentiated progeny restricted to the luminal lineage; (b) clarify the function of EGF in the control of the BC44 cell phenotypic plasticity; and (c) suggest a role for this phenomenon in the mammary gland development.