PS2, a small estrogen-inducible secretory polypeptide with structural analogies to a growth factor, is produced by approximately 50% of human breast tumors. The function of PS2 is, however, unknown. To determine whether PS2 may play an autocrine role in the development of mammary tumors we constructed transgenic mice bearing fusion constructs designed to direct the expression of human PS2 in the lactating mammary gland under the control of the whey acidic protein (WAP) promoter. Mouse lines bearing the genomic PS2 gene under the control of the WAP promoter region (WAP-PS2-2) failed to express the transgene. However, mice harboring the fusion construct WAP-PS2-1, in which the PS2 coding sequence is inserted into the 5' untranslated region of the complete WAP gene, were observed to express the transgene. Expression was restricted to the secretory epithelium of the mammary gland during lactation, and PS2 protein was secreted into the milk. Nevertheless, no mammary gland dysplasia was observed, and PS2 expression had no discernable effect upon the physiology and/or development of the suckling young or the transgenic mother.