The female reproductive hormones estrogens, progesterone, and prolactin control postnatal breast development and are important to breast carcinogenesis. In particular, exposure to progesterone is tightly linked to breast cancer risk. Using the mouse as a model system to study the mechanisms through which hormones elicit morphogenetic changes in the mammary gland in vivo, we demonstrated that progesterone acts by a paracrine mechanism and identified Wnt4 as a target of progesterone important in mediating side branch formation. The mechanisms underlying Wnt4 function remains poorly understood. To understand the pattern of canonical Wnt signaling activation during mammary gland development and to address which cellular compartment of the mammary gland is activated by canonical Wnt signaling, a reporter mouse model was utilized in which the lacZ gene is under the control of endogenous Axin2 promoter, classical target promoter of canonical Wnt signaling. Analysis of reporter mice at different developmental stages of mammary gland development showed the highest reporter activity during early pregnancy which correlated with the time of side branch formation. At this stage, β-galactosidase activity was found exclusively in myoepithelial cells. Overexpression of Wnt1 from MMTV promoter increases reporter activity in the myoepithelium. Gene expression analysis on FACS sorted luminal and myoepithelial cells shows that known canonical Wnt signaling pathway components such as receptors and co receptors as well as targets are specifically expressed in the myoepithelial compartment further supporting the notion that myoepithelial cells are the target cells for Wnt1 and Wnt4 secreted by luminal cells. Consistent with a model whereby progesterone induced Wnt4 secretion results in canonical Wnt signaling activation, reporter activity was induced by progesterone treatment and lacZ expression increased during diestrus when serum progesterone levels are high under physiological conditions. Analysis of contralateral mammary glands engrafted with PR-/-.Axin2 lacZ and PR+/-.Axin2 lacZ epithelium during pregnancy revealed that intact PR signaling is required to activate canonical Wnt signaling. Similar experiments with Wnt4-/-.Axin2 lacZ and Wnt4+/+.Axin2 lacZ mammary epithelium showed that reporter activation relies on Wnt4. Histological analysis on mammary glands in which β-catenin was ablated using MMTV-Cre revealed that β-catenin deleted cells were present only in the luminal epithelial compartment and showed that β-catenin deleted myoepithelial cells cannot participate in side branch formation. Similarly, ectopic expression of dominant negative β-catenin in wt MECs reduced side branching indicating that canonical Wnt signaling mediated by β-catenin is required for side branching. Furthermore, constitutive activation of β-catenin in the mammary epithelium was sufficient to induce side branch formation in virgin mice. In Wnt4 mutant epithelium, proliferation of progesterone receptor positive and negative cells were significantly reduced in response to progesterone treatment. Wnt signaling has been implicated in stem/progenitor activation in several tissues including mammary gland. Consistent with Wnt4 activating stem/progenitors, serial transplantation assays revealed that Wnt4-/- epithelium failed to reconstitute already at 2nd to 3rd generation when the wt has the ability to reconstitute up to seven generations indicating that Wnt4 is required for stem cell function while Wnt4 is dispensable for embryonic and rudimentary mammary gland formation. Histology and gene expression analysis in late pregnancy showed that Wnt4 mutant epithelia were able to differentiate and produce milk proteins, further supporting the thought that Wnt4 function is important for stem/progenitor cell activity and not required for differentiation. Taken together, I report that Wnt4 induces canonical Wnt signaling in myoepithelial cells and activation of canonical Wnt signaling is required and sufficient for side branching. Moreover, Wnt4 function is essential for mammary stem/progenitor cells.