A conditional null mutation of peroxisome proliferator-activated receptor-binding protein (PBP) gene was generated to understand its role in mammary gland development. PBP-deficient mammary glands exhibited retarded ductal elongation during puberty, and decreased alveolar density during pregnancy and lactation. PBP-deficient mammary glands could not produce milk to nurse pups during lactation. Both the mammary ductal elongation in response to estrogen treatment and the mammary lobuloalveolar proliferation stimulated by estrogen plus progesterone were attenuated in PBP-deficient mammary glands. The proliferation index was decreased in PBP-deficient mammary glands. PBP-deficient mammary epithelial cells expressed abundant beta-casein, whey acidic protein, and WDNM1 mRNA, indicating a relatively intact differentiated function. PBP-deficient epithelial cells were unable to form mammospheres, which were considered to be derived from mammary progenitor/stem cells. We conclude that PBP plays a pivotal role in the normal mammary gland development.