A mammary-derived growth inhibitor-related gene (MRG) was previously identified and characterized. MRG induces differentiation of mammary epithelial cells in vitro and its expression is associated with mammary differentiation. To further define the role of MRG on mammary gland differentiation, a MRG transgenic mice model under the control of mouse mammary tumor virus promoter was established and the effect of MRG on mammary gland differentiation was investigated at histological and molecular levels. Expression of endogenous mouse MRG gene was significantly increased from the non-differentiated gland of control virgin mice to the functionally differentiated gland of pregnant control mice. Whole mount analyses demonstrated that ductal development was not affected by MRG transgene expression. While there was no lobuloalveolar structure in control virgin mice, expression of MRG transgene in the mammary gland resulted in the development of lobuloalveolar-like structure, which mimics the gland from early pregnancy. Consistent with the morphological change, expression of MRG also increased milk protein -casein expression in the gland. To study the mechanism of MRG-induced mammary differentiation, we investigated the Stat5 activation in the glands from the transgenic mouse versus virgin control mouse. While activated Stat5 was expressed at the minimal level in the non-differentiated control virgin gland, a significant Stat5 phosphorylation was observed in the virgin transgenic gland. Our data indicate that MRG is a mediator of the differentiating effects of pregnancy on breast epithelium, and overexpression of MRG in young nulliparous mice can induce differentiation.In an effort to search for growth regulators in the human mammary gland development, we generated cDNA libraries from a breast cancer biopsy specimen and a normal breast and analyzed these libraries by differential cDNA sequencing (1, 2). We identified, cloned, and characterized a novel tumor growth inhibitor and named it as a mammary-derived growth inhibitor-related gene MRG 1 (3). The predicted amino acid sequence of MRG has a significant sequence homology to previously identified mammary derived growth inhibitor MDGI (4). Interestingly, MRG and MDGI revealed no homology to any other known growth inhibitors; rather, they revealed extensive sequence homology to fatty acid binding protein (FABP) (5, 6). A striking homology was evident between MDGI and heart type (H-) FABP, which differ only in seven positions of the amino acid sequence (5). In fact, it turned out that the originally described MDGI is the same protein of H-FABP, which is also expressed in mammary gland (7,8). H-FABP fully replaced the MDGI effect and inhibited the growth of mammary epithelial cells (7). Thus, MDGI was also named as H-FABP. Interestingly, similar to the story of MDGI and H-FABP, subsequent to our isolation of MRG, human brain type (B-) FABP was independently cloned from human fetal whole-brain cDNA library (9). In fact, the sequence of MRG was found to be exactly identical to...