Progesterone (P) and prolactin (PRL) fulfill crucial roles during growth and differentiation of the mammary epithelium, and each has been implicated in the pathogenesis of mammary cancer. We previously identified that these hormones synergistically stimulate the proliferation of mouse mammary epithelial cells in vivo, although the mechanism(s) underlying their cooperative effect are unknown. We now report a novel pathway by which P and PRL synergize to activate transcription from the long terminal repeat (LTR) of the mouse mammary tumor virus-LTR (MMTV-LTR) in T47D breast cancer cells. Using serial 5' and 3' deletions of the MMTV-LTR, in addition to selective mutations, we identified that a previously uncharacterized inverted palindrome on the distal enhancer (-941/-930), in addition to a signal transducer and activator of transcription 5 site, was essential for the synergistic activation of transcription by P and PRL. Notably, hormone synergy occurred via a mechanism that was independent of the P receptor DNA-binding elements found in the proximal MMTV-LTR hormone-response element. The palindrome specifically recruited a protein complex (herein termed mammary gland-specific complex) that was almost exclusive to normal and cancerous mammary cells. The synergy between P and PRL occurred via a Janus kinase 2 and c-Src/Fyn-dependent signaling cascade downstream of P and PRL receptors. Combined, our data outline a novel pathway in T47D cells that may facilitate the action(s) of P and PRL during mammary development and breast cancer.