It has been suggested that whey acidic protein (WAP) may function as a protease inhibitor. However, the actual function of WAP remains obscure. We investigated the histological development of the mammary glands of transgenic mice ubiquitously expressing WAP and CAG/WAP transgene. Ubiquitous expression of WAP induced aberrant development of the lobular alveoli of the mammary glands: mammary alveoli that were either aberrantly large or small in size increased in number in the developing mammary glands of these transgenic females during pregnancy and lactation. The expression of β-casein was precociously induced in the mammary glands of the transgenic females during early pregnancy and accompanying this was a histological observation that abnormally developed lobular alveoli filled with milk proteins appeared in the mammary glands of transgenic females during early pregnancy. However, during lactation, the development of mammary glands was impaired in transgenic females. To investigate the possible paracrine action of WAP associated with mammary gland aberration, we transplanted the mammary tissue of CAG/EGFP transgenic females into the fat pad of virgin CAG/WAP transgenic females and initiated pregnancy by mating. The development of mammary tissue transplanted to the recipient was histologically examined on day 3 of lactation. The results revealed that the development of grafted mammary tissues was impaired in a manner similar to that of the mammary glands of CAG/WAP transgenic females, indicating that the inhibitory effect of WAP acts via a paracrine mechanism. In vitro experiments using HC11 cells with forced expression of exogenous WAP demonstrated the inhibitory function of WAP on proliferation of mammary epithelial cells.