LIM domain factors and associated cofactors are important developmental regulators in pattern formation and organogenesis. In addition, overexpression of two LIM-only factors (LMOs) causes acute lymphocytic leukemia. The more recently discovered LMO factor LMO4 is highly expressed in proliferating epithelial cells, and frequently overexpressed in breast carcinoma. Here we show that while LMO4 is expressed throughout mammary gland development, it is dramatically upregulated in mammary epithelial cells during midpregnancy. The LMO coactivator Clim2/Ldb1/NLI showed a similar expression pattern, consistent with the idea that LMO4 and Clim2 act as a complex in mammary epithelial cells. In MCF-7 cells, LMO4 transcripts were upregulated by heregulin, an activator of ErbB receptors that are known to be important in mammary gland development and breast cancer. To test the hypothesis that LMO4 plays roles in mammary gland development, we created an engrailed-LMO4 fusion protein. This fusion protein maintains the ability to interact with Clim2, but acts as a dominant repressor of both basal and activated transcription when recruited to a DNA-regulatory region. When the engrailed-LMO4 fusion protein was expressed under control of the MMTV promoter in transgenic mice, both ductular development in virgin mice and alveolar development in pregnant mice were inhibited. These results suggest that LMO4 plays a role in promoting mammary gland development.