The nuclear factor-κB (NF-κB) family of transcription factors has been shown to regulate proliferation in several cell types. Although recent studies have demonstrated aberrant expression or activity of NF-κB in human breast cancer cell lines and tumors, little is known regarding the precise role of NF-κB in normal proliferation and development of the mammary epithelium. We investigated the function of NF-κB during murine early postnatal mammary gland development by observing the consequences of increased NF-κB activity in mouse mammary epithelium lacking the gene encoding IκBα, a major inhibitor of NF-κB. Mammary tissue containing epithelium from inhibitor κBα (IκBα)-deficient female donors was transplanted into the gland-free mammary stroma of wild-type mice, resulting in an increase in lateral ductal branching and pervasive intraductal hyperplasia. A two- to threefold increase in epithelial cell number was observed in IκBα-deficient epithelium compared with controls. Epithelial cell proliferation was strikingly increased in IκBα-deficient epithelium, and no alteration in apoptosis was detected. The extracellular matrix adjacent to IκBα-deficient epithelium was reduced. Consistent with in vivo data, a fourfold increase in epithelial branching was also observed in purified IκBα-deficient primary epithelial cells in three-dimensional culture. These data demonstrate that NF-κB positively regulates mammary epithelial proliferation, branching, and functions in maintenance of normal epithelial architecture during early postnatal development.