In the mammary gland, genetic circuits controlled by estrogen, progesterone, and prolactin, act in concert with pathways regulated by members of the epidermal growth factor family to orchestrate growth and morphogenesis during puberty, pregnancy and lactation. However, the precise mechanisms underlying the crosstalk between the hormonal and growth factor pathways remain poorly understood. We have identified the CUB and zona pellucida-like domain-containing protein 1 (CUZD1), expressed in mammary ductal and alveolar epithelium, as a novel mediator of mammary gland proliferation and differentiation during pregnancy and lactation. Cuzd1-null mice exhibited a striking impairment in mammary ductal branching and alveolar development during pregnancy, resulting in a subsequent defect in lactation. Gene expression profiling of mammary epithelium revealed that CUZD1 regulates the expression of a subset of the EGF family growth factors, epiregulin, neuregulin-1, and epigen, which act in an autocrine fashion to activate ErbB1 and ErbB4 receptors. Proteomic studies further revealed that CUZD1 interacts with a complex containing JAK1/JAK2 and STAT5, downstream transducers of prolactin signaling in the mammary gland. In the absence of CUZD1, STAT5 phosphorylation in the mammary epithelium during alveologenesis was abolished. Conversely, elevated expression of Cuzd1 in mammary epithelial cells stimulated prolactin-induced phosphorylation and nuclear translocation of STAT5. Chromatin immunoprecipitation confirmed co-occupancy of phosphorylated STAT5 and CUZD1 in the regulatory regions of epiregulin, a potential regulator of epithelial proliferation, and whey acidic protein, a marker of epithelial differentiation. Collectively, these findings suggest that CUZD1 plays a critical role in prolactin-induced JAK/STAT5 signaling that controls the expression of key STAT5 target genes involved in mammary epithelial proliferation and differentiation during alveolar development.