We have previously demonstrated that the transcription factor nuclear factor (NF)1-C2 plays an important role in the mammary gland for the activation of the tumor suppressor gene p53. It also activates the milk genes carboxyl ester lipase and whey acidic protein, implying that NF1-C2 participates both in the establishment of a functional gland and in protection of the gland against tumorigenesis during proliferation. In this study, we have developed a new sensitive NF1-C2-specific antiserum for immunohistochemical analyses of the NF1-C2 distribution during mammary gland development. We show that the NF1-C2 protein is present in the epithelial compartment at the virgin stage and throughout mammary gland development. However, in the lactation stage the NF1-C2 protein levels strongly decreased, and many epithelial nuclei stained negative. In situ hybridization shows that NF1-C2 transcripts are expressed in the whole epithelium at pregnancy as well as the lactation stage, indicating that the reduction in protein levels is posttranscriptionally regulated. At involution, the NF1-C2 proteins are back to high levels. Based on studies using NMuMG cells and mammary tissue from heterozygous prolactin receptor knockout mice, we also demonstrate that prolactin has a direct effect in the maintenance of the NF1-C2 protein levels in the mammary epithelial nuclei at the virgin stage and during pregnancy. Hence, we have identified another transcription factor in the mammary gland, besides signal transducer and activator of transcription 5, through which prolactin may control mammary gland development. Furthermore, our data suggest a link between prolactin and p53 in the mammary gland, through NF1-C2.