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Even though mutations in the tumor suppressor, BRCA1, markedly increase the risk of breast and ovarian cancer, most breast and ovarian cancers express wild type BRCA1. An important question is therefore how the tumor-suppressive function of normal BRCA1 is overcome during development of most cancers. Because prolactin promotes these and other cancers, we investigated the hypothesis that prolactin interferes with the ability of BRCA1 to inhibit the cell cycle. Examining six different cancer cell lines with wild type BRCA1, and making use of both prolactin and the growth-inhibiting selective prolactin receptor modulator, S179D PRL, we demonstrate that prolactin activation of Stat5 results in the formation of a complex between phospho-Stat5 and BRCA1. Formation of this complex does not interfere with nuclear translocation or binding of BRCA1 to the p21 promoter, but does interfere with the ability of BRCA1 to transactivate the p21 promoter. Overexpression of a dominant-negative Stat5 in prolactin-stimulated cells resulted in increased p21 expression. We conclude that prolactin inhibits a major tumor-suppressive function of BRCA1 by interfering with BRCA1's upregulation of expression of the cell cycle inhibitor, p21. [ABSTRACT FROM AUTHOR]