The mechanisms that control the emergence of different anterior pituitary cells from a common stem cell population are largely unknown. The immortalized GHFT cells derived from targeted expression of SV40 T antigen to mouse pituitary display characteristics of somatolactotropic progenitors in that they express the transcription factor GHF-1 (Pit-1) but not growth hormone (GH) or prolactin (PRL). We searched for factors capable of inducing lactotropic differentiation of GHFT cells. PRL gene expression was not observed in cells subjected to a variety of stimuli, which induce PRL gene expression in mature lactotropes. Only fibroblast growth factor-2 (FGF-2) was able to initiate the transcription, synthesis, and release of PRL in GHFT cells. However, induction of PRL expression was incomplete in FGF-2-treated cells, suggesting that additional factors are necessary to attain high levels of PRL transcription in fully differentiated lactotropes. We also show that the FGF-2 response element is located in the proximal PRL promoter. Stimulation of PRL expression by FGF-2 requires endogenous Ets factors and these factors as well as GHF-1 are expressed at low levels in the committed precursor, suggesting that these low levels are limiting for full PRL expression. Moreover, FGF-2 effect on lactotrope differentiation is mediated, at least partially, by stimulation of the Ras-signaling pathway. Our results suggest that, indeed, GHFT cells represent a valid model for studying lactotropic differentiation and that FGF-2 could play a key role both in initiating lactotrope differentiation and maintaining PRL expression.