Naïve T-helper cells differentiate into Th1 and Th2 subsets that have unique cytokine signatures, activators, and transcriptional targets. The Th1/Th2 cytokine milieu is a key paradigm in T-cell lineage commitment and IL-4/IL-13 and Stat6 are known to be important mediators of Th2 development. We have now demonstrated that this paradigm applies also to mammary epithelial cells, which undergo a switch from Th1 to Th2 cytokine production upon the induction of differentiation. Thus, the Th1 cytokines IL-12, IFNγ, and TNFα are downregulated concomitantly with the upregulation of the Th2 cytokines IL-4, IL-13 and IL-5 as epithelial cells commit to the luminal alveolar lineage. Moreover, we show that Th2 cytokines play a crucial role in mammary gland development in vivo, because differentiation and alveolar morphogenesis are reduced in both Stat6 and IL-4/IL-13 doubly deficient mice during pregnancy. This unexpected discovery demonstrates a role for immune cell cytokines in epithelial cell fate and function, and adds an unexpected tier of complexity to the previously held paradigm that steroid and peptide hormones are the primary regulators of mammary gland development.