BTG2, a p53-inducible antiproliferative gene, is stimulated in breast cancer cells by activation of nuclear factor kappa B (NF-kappaB). In rat mammary glands, BTG2 is expressed in epithelial cells and levels decreased during pregnancy and lactation but recovered during involution. Estrogen and progestin suppress BTG2 expression, suggesting that these steroids, which stimulate proliferation and lobuloalveolar development of mammary epithelial cells, may downregulate BTG2 in the mammary gland during pregnancy. Consistent with the report that BTG2 inhibits cyclin D1 expression, suppression of BTG2 mRNA in the mammary gland during gestation, and by estrogen and progestin, correlated with stimulation of cyclin D1. Ectopic expression of BTG2 inhibited breast cancer cell growth by arresting cells in the G1 phase, an effect reversed by cyclin D1. BTG2 expression was very low or undetectable in human breast cancer cell lines compared with nontumorigenic mammary epithelial cells, and nuclear expression of BTG2 was absent in 65% of human breast tumors compared with adjacent matched normal glands. Spontaneous mammary tumors arising in a mouse model with targeted expression of the early region of the SV40 large tumor Ag demonstrated loss of BTG2 protein very early during the tumorigenic process. Thus deregulation of BTG2 may be an important step in the development of mammary tumors.