Maspin is a unique member of the serpin family, which functions as a class II tumor suppressor gene. Despite its known activity against tumor invasion and motility, little is known about maspin's functions in normal mammary gland development. In this paper, we show that maspin does not act as a tPA inhibitor in the mammary gland. However, targeted expression of maspin by the whey acidic protein gene promoter inhibits the development of lobular-alveolar structures during pregnancy and disrupts mammary gland differentiation. Apoptosis was increased in alveolar cells from transgenic mammary glands at midpregnancy. However, the rate of proliferation was increased in early lactating glands to compensate for the retarded development during pregnancy. These findings demonstrate that maspin plays an important role in mammary development and that its effect is stage dependent.