The developmental process of prolactin (PRL) cells in the fetal pituitary gland was studied in mice. Although PRL cells were hardly detectable in the pituitary gland of intact fetuses, a treatment with 17beta-estradiol (E(2)) in vitro induced a number of PRL cells that varied drastically in number depending on the stage of gestation with a peak at embryonic d 15. This effect was specific to E(2), with epidermal growth factor, insulin, and forskolin failing to induce PRL cells. Although both estrogen receptor (ER)alpha and ERbeta were expressed in the fetal pituitary gland, the results from ER knockout models showed that only ERalpha mediates E(2) action on PRL cells. A few PRL cells were observed in ERalpha-deficient mice as well as in their control littermates, suggesting that estrogen is not required for the phenotype determination of PRL cells. Unexpectedly, the effect of E(2) on the induction of PRL cells in vitro was diminished after embryonic d 15. Present results suggest that the exposure of fetal PRL cells to glucocorticoids (GCs) results in a reduction of sensitivity to E(2). The mechanism underlying the down-regulation of estrogen sensitivity by GCs was found not to be down-regulation of ER levels, induction of annexin 1, a GC-inducible inhibitor of PRL secretion, or a decrease in the number of PRL precursors by apoptosis. The effect of GCs appeared within 2 h and did not require a de novo protein synthesis. GCs are considered to be involved in the mechanisms of silencing pituitary PRL in gestation possibly through a novel mechanism.