To identify the potential functions of peroxisome proliferator-activated receptor α (PPARα) in skin development, transgenic mice were generated to target constitutively activated PPARα (VP16PPARα) to the stratified epithelia by use of the keratin K5 promoter. In addition to marked alterations in epidermal development, the transgenic mice had a severe defect in lactation during pregnancy resulting in 100% pup mortality. In this study, the alteration of mammary gland development in these transgenic mice was investigated. The results showed that expression of the VP16PPARα transgene during pregnancy resulted in impaired development of lobuloalveoli, which is associated with reduced proliferation and increased apoptosis of mammary epithelia. Mammary epithelia from transgenic mice also showed a significant reduction in the expression of β-catenin and a down-regulation of one of its target genes, cyclin D1, which is thought to be required for lobuloalveolar development. Furthermore, upon PPARα ligand treatment, similar effects on lobuloalveolar development were observed in wild-type mice, but not in PPARα-null mice. These findings suggest that PPARα activation has a marked influence in mammary lobuloalveolar development.