Aromatase transgenic mice exhibit hyperplastic and dysplastic changes, attesting to the importance of local estrogen in breast carcinogenesis. These mice also show increased levels of the estrogen receptor alpha and beta (ERalpha, ERbeta) suggesting that this receptor may play an important role in the initiation of estrogen-mediated mammary hyperplasia observed in these mice. To address the specific role of ERalpha in the mammary development and in the induction of estrogen-mediated hyperplasia in aromatase transgenic mice, we have generated MMTV-aromatase x ERalpha knockout cross (referred as aromatase/ERKO). Even though ERbeta is expressed in aromatase/ERKO mice, lack of ERalpha leads to impaired mammary growth in these mice. The data suggest that ERalpha plays an important role in the mammary gland development as well as in the induction of mammary hyperplasia in aromatase transgenic mice. Lack of ERalpha expression in the aromatase/ERKO mice resulted in a decrease in the expression of Cyclin D1, PCNA and TGFbeta relative to the aromatase parental strain. The studies involving aromatase/ERKO mice show that lack of ERalpha results in impaired mammary development even in the presence of continuous tissue estrogen, suggesting estrogen/ERalpha-mediated actions are critical for mammary development and carcinogenesis.