The mammary glands of euthyroid female C3H/HeN mice undergo a series of morphological changes during development. In glands from immature animals, the epithelial component consists of a sparse ductal system with few branches which fills about one fourth of the fat pad. In the adult virgin gland, the epithelial component fills the fat pad with a highly branched ductal system and a few alveoli. In contrast, glands from adult animals maintained in a hypothyroid state by ingestion of thiouracil since weaning retain the primitive ductal appearance while filling the fat pad. The glands from animals made hyperthroid by adding 2 micrograms T4/ml drinking water have extensive lobulo-alveolar development. Glands from animals made hypothyroid during 7 weeks of involution after lactation have the same degree of deveopment as the euthyroid controls. When explants of tissue from adult hypothyroid virgin animals are cultured in serum-free medium containing insulin, hydrocortisone, and PRL, the specific milk protein, alpha-lactalbumin, is induced. The level of alpha-lactalbumin, measured as lactose synthetase activity, found per ng epithelial DNA is the same as that found in explants from glands of euthyroid virgins. These results suggest that thyroid hormones, in concert with PRL, play an important role in the regulation of development of the mouse mammary gland. Decreased levels of thyroid hormones in the serum result in retarded growth of the ductal system and little or no alveolar development. However, the resulting epithelial component of glands from hypothyroid mice is fully capable of differentiating in vitro when exposed to the proper hormonal environment.