The Neuregulin gene family encodes EGF-containing ligands which mediate their effects by binding to the ERBB receptor tyrosine kinases, a signalling network with important roles in both mammary gland development and breast cancer. Neuregulin3 (NRG3), a ligand for ERBB4, promotes early mammary morphogenesis and acts during specification of the mammary placode, an aggregate of epithelial cells that forms during mid-embryogenesis. Recent studies have shown that NRG3 can alter the cell fate of other epidermal progenitor populations when NRG3 is mis-expressed throughout the basal layer of the developing epidermis with the K14 promoter. Here evidence for a key function for NRG3 in promoting early mammary morphogenesis and the implication for the role of NRG3 in breast cancer and establishment of the mammary lineage are discussed.