Mammary gland development is controlled by a dynamic interplay between endocrine hormones and locally produced factors. Biogenic monoamines (serotonin, dopamine, norepinephrine, and others) are an important class of bioregulatory molecules that have not been shown to participate in mammary development. Here we show that mammary glands stimulated by prolactin (PRL) express genes essential for serotonin biosynthesis (tryptophan hydroxylase [TPH] and aromatic amine decarboxylase). TPH mRNA was elevated during pregnancy and lactation, and serotonin was detected in the mammary epithelium and in milk. TPH was induced by PRL in mammosphere cultures and by milk stasis in nursing dams, suggesting that the gene is controlled by milk filling in the alveoli. Serotonin suppressed β-casein gene expression and caused shrinkage of mammary alveoli. Conversely, TPH1 gene disruption or antiserotonergic drugs resulted in enhanced secretory features and alveolar dilation. Thus, autocrine-paracrine serotonin signaling is an important regulator of mammary homeostasis and early involution.