We have studied the role of the cyclin-dependent kinase (Cdk) inhibitor p27(Kip1) in postnatal mammary gland morphogenesis. Based on its ability to negatively regulate cyclin/Cdk function, loss of p27 may result in unrestrained cellular proliferation. However, recent evidence about the stabilizing effect of p27 on cyclin D1-Cdk4 complexes suggests that p27 deficiency might recapitulate the hypoplastic mammary phenotype of cyclin D1-deficient animals. These hypotheses were investigated in postnatal p27-deficient (p27(-/-)), hemizygous (p27(+/)-), or wild-type (p27(+/+)) mammary glands. Mammary glands from p27(+/)- mice displayed increased ductal branching and proliferation with delayed postlactational involution. In contrast, p27(-/-) mammary glands or wild-type mammary fat pads reconstituted with p27(-/-) epithelium produced the opposite phenotype: hypoplasia, low proliferation, decreased ductal branching, impaired lobuloalveolar differentiation, and inability to lactate. The association of cyclin D1 with Cdk4, the kinase activity of Cdk4 against pRb in vitro, the nuclear localization of cyclin D1, and the stability of cyclin D1 were all severely impaired in p27(-/-) mammary epithelial cells compared with p27(+/+) and p27(+/-) mammary epithelial cells. Therefore, p27 is required for mammary gland development in a dose-dependent fashion and positively regulates cyclin D-Cdk4 function in the mammary gland.