Abstract Background Breast cancer is thought to arise in mammary epithelial stem cells. However, the identity of these stem cells is unknown. Methods Studies in the haematopoetic and muscle systems show that stem cells have the ability to efflux the dye Hoechst 33342. Cells with this phenotype are referred to as the side population (SP). We have adapted the techniques from the haematopoetic and muscle systems to look for a mammary epithelial SP. Results Of mammary epithelial cells isolated from both the human and mouse mammary epithelia, 0.2–0.45% formed a distinct SP. The SP was relatively undifferentiated but grew as typical differentiated epithelial clones when cultured. Transplantation of murine SP cells at limiting dilution into cleared mammary fat pads generated epithelial ductal and lobuloalveolar structures. Conclusion These data demonstrate the existence of an undifferentiated SP in human and murine mammary epithelium. Purified SP cells are a live single-cell population that retain the ability to differentiate in vitro and in vivo . Studies of haematopoetic cells have suggested that the SP phenotype constitutes a universal stem cell marker. This work therefore has implications for mammary stem cell biology.