Introduction: The organisation of the mammary epithelial hierarchy is poorly understood. Our hypothesis is that the luminal cell compartment is more complex than initially described, and that an understanding of the developmental relationships within this lineage will help in understanding the cellular context in which breast tumours occur.Methods: We used fluorescence-activated cell sorting along with in vitro and in vivo functional assays to examine the growth and differentiation properties of distinct subsets of human and mouse mammary epithelial cells. We also examined how loss of steroid hormones influenced these populations in vivo. Gene expression profiles were also obtained for all the purified cell populations and correlated to those obtained from breast tumours.Results: The luminal cell compartment of the mouse mammary gland can be resolved into nonclonogenic oestrogen receptor-positive (ER + ) luminal cells, ER + luminal progenitors and oestrogen receptor-negative (ER - ) luminal progenitors. The ER + luminal progenitors are unique in regard to cell survival, as they are relatively insensitive to loss of oestrogen and progesterone when compared with the other types of mammary epithelial cells. Analysis of normal human breast tissue reveals a similar hierarchical organisation composed of nonclonogenic luminal cells, and relatively differentiated (EpCAM + CD49f + ALDH - ) and undifferentiated (EpCAM + CD49f + ALDH + ) luminal progenitors. In addition, approximately one-quarter of human breast samples examined contained an additional population that had a distinct luminal progenitor phenotype, characterised by low expression of ERBB3 and low proliferative potential. Parent-progeny relationship experiments demonstrated that all luminal progenitor populations in both species are highly plastic and, at low frequencies, can generate progeny representing all mammary cell types. The ER - luminal progenitors in the mouse and the ALDH + luminal progenitors in the human appear to be analogous populations since they both have gene signatures that are associated with alveolar differentiation and resemble those obtained from basal-like breast tumours.Conclusion: The luminal cell compartment in the mammary epithelium is more heterogeneous than initially perceived since progenitors of varying levels of luminal cell differentiation and proliferative capacities can be identified. An understanding of these cells will be essential for understanding the origins and the cellular context of human breast tumours.