The breast undergoes dramatic changes in size, shape, and function in association with growth, reproduction, and post-menopausal regression. Those changes impact women's lifetime breast cancer risk. An early first full-term pregnancy exerts a protective effect, emphasizing the need for understanding the role of reproductive influences on breast development and on cancer initiation and progression, and providing a paradigm for developing preventive strategies based on physiological principles. Even though the cause of breast cancer and the ultimate mechanisms through which an early pregnancy protects from cancer development remain largely unknown, a likely explanation for this protection has been provided by experimental in vivo and in vitro models. These studies have led to the conclusions that cancer initiation requires the interaction of a carcinogen with an undifferentiated and highly proliferating mammary epithelium, whereas differentiation of the mammary gland inhibits carcinogenic initiation. The process of mammary gland differentiation is the result of complex interactions of ovarian, pituitary, and placental hormones, which in turn induce inhibition of cell proliferation, downregulation of estrogen and progesterone receptors, activation of specific genes, such as inhibin, mammary derived growth factor inhibitor and a serpin-like gene, and expression of extracellular matrix proteins in the normal breast. Cell immortalization and transformation are associated with the expression of ferritin H and S100P protein, which serve as markers of cancer initiation. Comparative studies of normal and neoplastic breast development have unraveled similarities with experimental models that validate the extrapolation of findings for testing hypotheses on the initiation and progression of breast cancer. Microsc. Res. Tech. 52:204–223, 2001. © 2001 Wiley-Liss, Inc.