We have examined the role of two mesenchymal ligands of epithelial tyrosine kinase receptors in mouse mammary gland morphogenesis. In organ cultures of mammary glands, hepatocyte growth factor (HGF, scatter factor) promoted branching of the ductal trees but inhibited the production of secretory proteins. Neuregulin (NRG, neu differentiation factor) stimulated lobulo-alveolar budding and the production of milk proteins. These functional effects are paralleled by the expression of the two factors in vivo: HGF is produced in mesenchymal cells during ductal branching in the virgin animal; NRG is expressed in the mesenchyme during lobulo-alveolar development at pregnancy. The receptors of HGF and NRG (c-met, c-erbB3, and c-erbB4), which are expressed in the epithelial cells, are not regulated. In organ culture, branching morphogenesis and lobulo-alveolar differentiation of the mammary gland could be abolished by blocking expression of endogenous HGF and NRG by the respective antisense oligonucleotides; in antisense oligonucleotide-treated glands, morphogenesis could again be induced by the addition of recombinant HGF and NRG. We thus show that two major postnatal morphogenic periods of mammary gland development are dependent on sequential mesenchymal-epithelial interactions mediated by HGF and NRG.