Characterizing mechanisms regulating mammary cell growth and differentiation is vital, as they may contribute to breast carcinogenesis. Here, we examine a cross talk mechanism(s) downstream of prolactin (PRL), a primary differentiation hormone, and epidermal growth factor (EGF), an important proliferative factor, in mammary epithelial cell growth and differentiation. Our data indicate that EGF exerts inhibitory effects on PRL-induced cellular differentiation by interfering with Stat5a-mediated gene expression independent of the PRL-proximal signaling cascade. Additionally, our data show that PRL is a potent inhibitor of EGF-induced cell proliferation. We identify tyrosine phosphorylation of the growth factor receptor-bound protein 2 (Grb2) as a critical mechanism by which PRL antagonizes EGF-induced cell proliferation by attenuating the activation of the Ras/mitogen-activated protein kinase (MAPK) pathway. Together, our results define a novel negative cross-regulation between PRL and EGF involving the Jak2/Stat5a and Ras/MAPK pathways through tyrosine phosphorylation of Grb2.