Hydroxysteroid (17beta) dehydrogenase 1 (HSD17B1) converts low active estrogen, estrone, to highly active estradiol with high catalytic efficiency. Altered HSD17B1 expression has been associated with several hormone dependent diseases, including endometriosis, ovarian epithelial cancer, and breast cancer. We have developed a transgenic mouse line over-expressing human HSD17B1 (HSD17B1TG mice). These mice have increased HSD17B1 activity in multiple tissues including mammary gland. HSD17B1TG females show extensive lobuloalveolar development at the age of 4 months forward that resembles the structure present in mammary gland of pregnant wild type mice. Serum prolactin levels were found to be higher in HSD17B1TG female mice than in normal mice. HSD17B1TG mice also develop hyperplastic alveolar nodules (HANs), and later on, mammary cancers. Accordingly, HANs along with inflammatory cell infiltration and increased mammary epithelial cell proliferation is observed in mammary glands of wild type female mice transplanted with HSD17B1TG mammary epithelium. However, there was no difference in epithelial cell estrogen receptor alpha expression, but estrogen receptor beta expression was increased in HSD17B1TG transplanted mammary glands compared with wild type transplanted mammary glands. These data indicate involvement of increased mammary epithelial HSD17B1 expression in development of hyperplastic mammary lesions, putative precursors of mammary cancer.