Members of the transforming growth factor-β (TGF-β) superfamily signal through heteromeric type I and type II serine/threonine kinase receptors. Transgenic mice that overexpress a dominant-negative mutation of the TGF-β type II receptor (DNIIR) under the control of a metallothionein-derived promoter (MT-DNIIR) were used to determine the role of endogenous TGF-βs in the developing mammary gland. The expression of the dominant-negative receptor was induced with zinc and was primarily localized to the stroma underlying the ductal epithelium in the mammary glands of virgin transgenic mice from two separate mouse lines. In MT-DNIIR virgin females treated with zinc, there was an increase in lateral branching of the ductal epithelium. We tested the hypothesis that expression of the dominant-negative receptor may alter expression of genes that are expressed in the stroma and regulated by TGF-βs, potentially resulting in the increased lateral branching seen in the MT-DNIIR mammary glands. The expression of hepatocyte growth factor mRNA was increased in mammary glands from transgenic animals relative to the wild- type controls, suggesting that this factor may play a role in TGF-β-mediated regulation of lateral branching. Loss of responsiveness to TGF-βs in the mammary stroma resulted in increased branching in mammary epithelium, suggesting that TGF-βs play an important role in the stromal-epithelial interactions required for branching morphogenesis.