Disruption of the retinoblastoma (RB) tumor suppressor pathway is a common and important event in breast carcinogenesis. To examine the role of the retinoblastoma protein (pRB) in this process, we created human mammary epithelial cells (HMEC) deficient for pRB by infecting primary outgrowth from breast organoids with the human papillomavirus type 16 (HPV16) E7 gene. HPV16 E7 binds to and inactivates pRB and also causes a significant down-regulation of the protein. Culturing normal HMEC in a reconstituted basement membrane (rBM) provides a correct environment and signaling cues for the formation of differentiated, acini-like structures. When cultured in this rBM, HMEC+E7 were found to respond morphologically as normal HMEC and form acinar structures. In contrast to normal HMEC, many of the cells within the HMEC+E7 structures were not growth arrested, as determined by a 5-bromo-2′-deoxyuridine incorporation assay. pRB deficiency did not affect polarization of these structures, as indicated by the normal localization of the cell-cell adhesion marker E-cadherin and the basal deposition of a collagen IV membrane. However, in HMEC+E7 acini, we were unable to detect by immunofluorescence microscopy the milk protein lactoferrin or cytokeratin 19, both markers of differentiation expressed in the normal HMEC structures. These data suggest that loss of RB in vivo would compromise differentiation, predisposing these cells to future tumor-promoting actions.