Mammary epithelial cells undergo changes in growth, invasion, and differentiation throughout much of adulthood, and most strikingly during pregnancy, lactation, and involution. Although the pathways of milk protein expression are being elucidated, little is known, at a molecular level, about control of mammary epithelial cell phenotypes during normal tissue morphogenesis and evolution of aggressive breast cancer. We developed a murine mammary epithelial cell line, SCp2, that arrests growth and functionally differentiates in response to a basement membrane and lactogenic hormones. In these cells, expression of Id-1, an inhibitor of basic helix-loop-helix transcription factors, declines prior to differentiation, and constitutive Id-1 expression blocks differentiation. Here, we show that SCp2 cells that constitutively express Id-1 slowly invade the basement membrane but remain anchorage dependent for growth and do not form tumors in nude mice. Cells expressing Id-1 secreted a approximately 120-kDa gelatinase. From inhibitor studies, this gelatinase appeared to be a metalloproteinase, and it was the only metalloproteinase detectable in conditioned medium from these cells. A nontoxic inhibitor diminished the activity of this metalloproteinase in vitro and repressed the invasive phenotype of Id-1-expressing cells in culture. The implications of these findings for normal mammary-gland development and human breast cancer were investigated. A gelatinase of approximately 120 kDa was expressed by the mammary gland during involution, a time when Id-1 expression is high and there is extensive tissue remodeling. Moreover, high levels of Id-1 expression and the activity of a approximately 120-kDa gelatinase correlated with a less-differentiated and more-aggressive phenotype in human breast cancer cells. We suggest that Id-1 controls invasion by normal and neoplastic mammary epithelial cells, primarily through induction of a approximately 120-kDa gelatinase. This Id-1-regulated invasive phenotype could contribute to involution of the mammary gland and possibly to the development of invasive breast cancer.