Tissue-specific gene expression in mammary epithelium is dependent on the extracellular matrix as well as hormones. There is good evidence that the basement membrane provides signals for regulating beta-casein expression, and that integrins are involved in this process. Here, we demonstrate that in the presence of lactogenic hormones, laminin can direct expression of the beta-casein gene. Mouse mammary epithelial cells plated on gels of native laminin or laminin-entactin undergo functional differentiation. On tissue culture plastic, mammary cells respond to soluble basement membrane or purified laminin, but not other extracellular matrix components, by synthesizing beta-casein. In mammary cells transfected with chloramphenicol acetyl transferase reporter constructs, laminin activates transcription from the beta-casein promoter through a specific enhancer element. The inductive effect of laminin on casein expression was specifically blocked by the E3 fragment of the carboxy terminal region of the alpha 1 chain of laminin, by antisera raised against the E3 fragment, and by a peptide corresponding to a sequence within this region. Our results demonstrate that laminin can direct tissue-specific gene expression in epithelial cells through its globular domain.