The mammary gland is a system of hollow interconnecting tubes which develops from an invasive branching cord of epithelial cells. This ultrastructural study of the developing mammary gland focuses on how the lumen forms and establishes the polarized epithelial lining of the gland. The earliest signs of lumen formation are many small cavities and crevices lined with microvilli which appear at scattered sites throughout the branching cords and neck of the gland. It is suggested that these initial small lumina form quite simply by separation of cells whose opposing faces are non-adhesive. The continuous central lumen of the gland develops by fusion and enlargement of the many small lumina. The cells adjacent to the developing lumen will form the polarized epithelial lining of the gland. Excess, more basal, epithelial cells degenerate. The lumen begins to appear when the branching pattern is almost complete. Thus, during morphogenesis, invasion by the mammary gland epithelium involves penetration of the mesenchyme by a solid cord of cells. We suggest that this cellular organization may be a fundamental characteristic of invasive epithelia and that a crucial step in the development of malignant epithelial tumours is a change in cell organization from a polarized cell sheet to a solid cord of cells which can invade.