The mouse mammary gland develops postnatally under the control of female reproductive hormones. Estrogens and progesterone trigger morphogenesis by poorly understood mechanisms acting on a subset of mammary epithelial cells (MECs) that express their cognate receptors, estrogen receptor alpha (ERalpha) and progesterone receptor (PR). Here, we show that in the adult female, progesterone drives proliferation of MECs in two waves. The first, small wave, encompasses PR(+) cells and requires cyclin D1, the second, large wave, comprises mostly PR(-) cells and relies on the tumor necrosis factor (TNF) family member, receptor activator of NF-kappaB-ligand (RANKL). RANKL elicits proliferation by a paracrine mechanism. Ablation of RANKL in the mammary epithelium blocks progesterone-induced morphogenesis, and ectopic expression of RANKL in MECs completely rescues the PR(-/-) phenotype. Systemic administration of RANKL triggers proliferation in the absence of PR signaling, and injection of a RANK signaling inhibitor interferes with progesterone-induced proliferation. Thus, progesterone elicits proliferation by a cell-intrinsic and a, more important, paracrine mechanism.