Normal human mammary epithelial cells (HMEC) isolated from surgically resected breast tissues were cultured under serum-free conditions using MCDB 170 medium. With the increase in the number of passages, in particular after the 5th passage, the number of enlarged, flattened and vacuolated cells increased while cell proliferation decreased. The senescent cells occasionally had keratohyaline granules in the cytoplasm and were positive in immunohistochemistry for keratinizing squamous epithelium-specific cytokeratin 10. When HMEC were cultured between floating double-layered collagen gels, the cells lost growth activity, showed marked stratification, and became positive for carcinoembryonic antigen (CEA). The stratified cells underwent squamous differentiation and tonofilament bundles appeared around the nuclei. The stratification and squamous differentiation of HMEC were observed within seven days after transfer to the three-dimensional culture, regardless of the number of passages. These results indicate that the HMEC in vitro ultimately differentiate into squamous epithelia and also that there is a close relationship between the squamous-type differentiation and the loss of cell proliferation.