Neuroepithelial transforming gene 1 (Net1) is a RhoA subfamily-specific guanine nucleotide exchange factor that is overexpressed in human breast cancer and is required for breast cancer cell migration and invasion. However, the role of Net1 in normal mammary gland development or function has never been assessed. To understand the role of Net1 in the mammary gland, we have created a conditional Net1 knockout mouse model. Whole-body deletion of Net1 results in delayed mammary gland development during puberty characterized by slowed of ductal extension and reduced ductal branching. Epithelial cells within the developing ducts show reduced proliferation that is accompanied by diminished estrogen receptor-α expression and activity. Net1-deficient mammary glands also exhibit reduced phosphorylation of regulatory subunits of myosin light chain and myosin light-chain phosphatase, indicating that RhoA-dependent actomyosin contraction is compromised. Net1 deficiency also leads to disorganization of myoepithelial and ductal epithelial cells and increased periductal collagen deposition. Mammary epithelial cell transplantation experiments indicate that reduced ductal branching and disorganization are cell autonomous. These data identify for the first time a role for NET1 in vivo and indicate that NET1 expression is essential for the proliferation and differentiation of mammary epithelial cells in the developing mammary gland.