Germline mutations in the breast cancer susceptibility genes, BRCA1 and BRCA2, are thought to account for a large portion of familial breast cancer. The increased risk of breast cancer in women carrying such mutations suggests that these proteins play a critical role in the growth regulation of mammary epithelial cells. Another protein, Stat5a, is known to be essential for growth and terminal differentiation of breast epithelial cells. Here we show that Stat5a forms a complex with both BRCA1 and BRCA2 in breast epithelial cells upon stimulation with prolactin. In addition, we show that the activity of Stat5a on the beta-casein promoter is modulated by both BRCA1 and BRCA2. This interaction may be important during the expansion and terminal differentiation of breast epithelial cells, as happens during pregnancy and lactation.