The cytokine-transforming growth factor beta1 (TGFB1) is implicated in development of the mammary gland through regulation of epithelial cell proliferation and differentiation during puberty and pregnancy. We compared mammary gland morphogenesis in virgin Tgfb1 ^/ , Tgfb1 ^/−, and Tgfb1^−/− mice and transplanted Tgfb1 ^/ and Tgfb1^−/− epithelium to determine the impact of TGFB1 deficiency on development. When mammary gland tissue was evaluated relative to the timing of puberty, invasion through the mammary fat pad of the ductal epithelium progressed similarly, irrespective of genotype, albeit fewer terminal end buds were observed in mammary glands from Tgfb1^−/− mice. The terminal end buds appeared to be normal morphologically, and a comparable amount of epithelial proliferation was evident. When transplanted into wild-type recipients, however, Tgfb1^−/− epithelium showed accelerated invasion compared with Tgfb1 ^/ epithelium. This suggests that the normal rate of ductal extension in Tgfb1^−/− null mutant mice is the net result of impaired endocrine or paracrine support acting to limit the consequences of unrestrained epithelial growth. By adulthood, mammary glands in cycling virgin Tgfb1^−/− mice were morphologically similar to those in Tgfb1 ^/ and Tgfb1 ^/− animals, with a normal branching pattern, and the tissue differentiated into early alveolar structures in the diestrous phase of the ovarian cycle. Transplanted mammary gland epithelium showed a similar extent of ductal branching and evidence of secretory differentiation of luminal cells in pregnancy. These results reveal two opposing actions of TGFB1 during pubertal mammary gland morphogenesis: autocrine inhibition of epithelial ductal growth, and endocrine or paracrine stimulation of epithelial ductal growth.