It is well established that milk production of the dairy cow is a function of mammary epithelial cell (MEC) number and activity and that these factors can be influenced by diverse environmental influences and management practises (nutrition, milk frequency, photoperiod, udder health, hormonal and local effectors). Thus, understanding how the mammary gland is able to respond to these environmental cues provides a huge potential to enhance milk production of the dairy cow. In recent years our understanding of molecular events within the MEC underlying bovine lactation has been advanced through mammary microarray studies and will be further advanced through the recent availability of the bovine genome sequence. In addition, the potential of epigenetic regulation (non-sequence inheritable chemical changes in chromatin, such as DNA methylation and histone modifications, which affect gene expression) to manipulate mammary function is emerging. We propose that a substantial proportion of unexplained phenotypic variation in the dairy cow is due to epigenetic regulation. Heritability of epigenetic marks also highlights the potential to modify lactation performance of offspring. Understanding the response of the MEC (cell signaling pathways and epigenetic mechanisms) to external stimuli will be an important prerequisite to devising new technologies for maximising their activity and, hence, milk production in the dairy cow.