Prenatal exposure to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) was investigated for its potential to predispose to breast cancer. Analysis of mammary gland differentiation and cell proliferation were used as biomarkers. Timed pregnant Sprague-Dawley CD rats were gavaged with 1 microg TCDD/kg on day 15 post-conception. Control animals were treated with the same volume of vehicle (sesame oil) on the same schedule. Mammary gland differentiation studies revealed that prenatal TCDD treatment, as compared with sesame oil treatment, resulted in significantly more terminal end buds and fewer lobules II in 50-day-old offspring, but no significant alterations to mammary gland differentiation in 21-day-old offspring. Terminal end buds are the most susceptible terminal ductal structures and lobules the least susceptible to carcinogenesis. Prenatal TCDD treatment did not alter labeling index in the mammary terminal ductal structures of 21- and 50-day-old rats, but the total proliferative compartment in terminal end buds of 50-day-old rats was larger. Prenatal TCDD treatment resulted in an increased number of chemically induced mammary adenocarcinomas in rats. TCDD delayed time of vaginal opening and caused disruption to the estrous cycle. Alteration to mammary gland differentiation (increased number of terminal end buds) is correlated with increased susceptibility to mammary cancer from prenatal exposure to TCDD.