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The nuclear factor-kappaB (NF-kappaB) family of transcription factors has been shown to regulate proliferation in several cell types. Although recent studies have demonstrated aberrant expression or activity of NF-kappaB in human breast cancer cell lines and tumors, little is known regarding the precise role of NF-kappaB in normal proliferation and development of the mammary epithelium. We investigated the function of NF-kappaB during murine early postnatal mammary gland development by observing the consequences of increased NF-kappaB activity in mouse mammary epithelium lacking the gene encoding IkappaBalpha, a major inhibitor of NF-kappaB. Mammary tissue containing epithelium from inhibitor kappaBalpha (IkappaBalpha)-deficient female donors was transplanted into the gland-free mammary stroma of wild-type mice, resulting in an increase in lateral ductal branching and pervasive intraductal hyperplasia. A two- to threefold increase in epithelial cell number was observed in IkappaBalpha-deficient epithelium compared with controls. Epithelial cell proliferation was strikingly increased in IkappaBalpha-deficient epithelium, and no alteration in apoptosis was detected. The extracellular matrix adjacent to IkappaBalpha-deficient epithelium was reduced. Consistent with in vivo data, a fourfold increase in epithelial branching was also observed in purified IkappaBalpha-deficient primary epithelial cells in three-dimensional culture. These data demonstrate that NF-kappaB positively regulates mammary epithelial proliferation, branching, and functions in maintenance of normal epithelial architecture during early postnatal development.