Insulin-like growth factor-binding protein 5 (IGFBP-5) mediates involution of the mammary gland. The decrease in DNA content and mammary gland weight which accompanies involution was inhibited by prolactin (PRL) in wild-type but not transgenic mice expressing IGFBP-5. Phospho-STAT5 protein levels were significantly lower in IGFBP-5 transgenic mice during lactation suggesting that IGFBP-5 antagonises PRL signalling in the mammary epithelium. In contrast, phospho-STAT3 levels increased during involution to a similar extent in both wild-type and transgenic mice and were unaffected by PRL. PRL inhibited gene expression of matrix metalloproteinases (MMPs) 3 and 12 but not tissue plasminogen activator or plasmin in wild-type and transgenic animals. The effects of PRL on MMPs appear to be indirect since PRL failed to inhibit MMP-3, -7 or -12 expression in HC-11 cells or in a co-transfection including an activated PRL receptor, STAT5 and a MMP-3-luciferase reporter gene. PRL is a potent inhibitor, both of cell death, an effect which is suppressed by IGFBP-5, and of MMP expression, which is independent of the actions of IGFBP-5.