PTEN tumor suppressor is frequently mutated in human cancers, including breast cancers. Female patients with inherited PTEN mutations suffer from virginal hypertrophy of the breast with high risk of malignant transformation. However, the exact mechanisms of PTEN in controlling mammary gland development and tumorigenesis are unclear. In this study, we generated mice with a mammary-specific deletion of the Pten gene. Mutant mammary tissue displayed precocious lobulo-alveolar development, excessive ductal branching, delayed involution and severely reduced apoptosis. Pten null mammary epithelial cells were disregulated and hyperproliferative. Mutant females developed mammary tumors early in life. Similar phenotypes were observed in Pten-null mammary epithelia that had been transplanted into wild-type stroma, suggesting that PTEN plays an essential and cell-autonomous role in controlling the proliferation, differentiation and apoptosis of mammary epithelial cells.