Transcription factor Stat5 (signal transducer and activator of transcription) is essential for PRL-induced terminal differentiation of mouse mammary epithelial cells during pregnancy and lactation and has been implicated in mammary tumorigenesis. A new and sensitive immunological method to detect active, tyrosine phosphorylated Stat5 in situ revealed that Stat5 is continuously activated in luminal epithelial cells of mouse and human breast, not only during pregnancy and lactation, but also outside of pregnancy. Examination of virgin Stat5a or Stat5b null mice suggested that Stat5a was the primary isoform activated in mammary epithelial cells. Basal activation of Stat5 in mammary epithelium of virgin wild-type mice was continuous throughout estrous cycle and was also detected in 17 of 17 normal human breast tissue specimens analyzed. PRL was identified as the principal factor maintaining basal activation of Stat5 in mammary epithelium of nonpregnant mice based on several lines of evidence. First, administration of PRL, but not GH or epidermal growth factor, uniformly enhanced basal activation of Stat5 in luminal mammary epithelial cells. Second, hypophysectomy disrupted basal activation of Stat5, an effect that was completely reversed by administration of PRL, but only partially by GH. Third, knock-out of the PRL receptor gene markedly reduced basal activation of Stat5, an effect that was maintained in a normalized endocrine environment after transplanting PRL receptor null mammary epithelium into wild-type mice. Continuous activation of Stat5 indicates a role of this transcription factor in normal, nonpregnant breast epithelial cells, and may shed new light on Stat5 involvement in breast tumor promotion.