The development of in vitro culture systems quantitatively and qualitatively recapitulating normal breast biology is key to the understanding of mammary gland biology. Current three-dimensional mammary culture systems have not demonstrated concurrent proliferation and functional differentiation ex vivo in any system for longer than 2 weeks. Here, we identify conditions including Neuregulin1 and R-spondin 1, allowing maintenance and expansion of mammary organoids for 2.5 months in culture. The organoids comprise distinct basal and luminal compartments complete with functional steroid receptors and stem/progenitor cells able to reconstitute a complete mammary gland in vivo. Alternative conditions are also described that promote enrichment of basal cells organized into multiple layers surrounding a keratinous core, reminiscent of structures observed in MMTV-Wnt1 tumours. These conditions comprise a unique tool that should further understanding of normal mammary gland development, the molecular mechanism of hormone action and signalling events whose deregulation leads to breast tumourigenesis.