Lineage commitment studies in mammary glands have focused on identifying cell populations that display stem or progenitor properties. However, the mechanisms that control cell fate have been incompletely explored. Herein we show that zinc finger protein 157 (Zfp157) is required to establish the balance between luminal alveolar pStat5- and Gata-3-expressing cells in the murine mammary gland. Using mice in which the zfp157 gene was disrupted, we found that alveologenesis was accelerated concomitantly with a dramatic skewing of the proportion of pStat5-expressing cells relative to Gata-3(+) cells. This suppression of the Gata-3(+) lineage was associated with increased expression of the inhibitor of helix-loop-helix protein Id2. Surprisingly, Gata-3 becomes dispensable in the absence of Zfp157, as mice deficient for both Zfp157 and Gata-3 lactate normally, although the glands display a mild epithelial dysplasia. These data suggest that the luminal alveolar compartment of the mammary gland is comprised of a number of distinct cell populations that, although interdependant, exhibit considerable cell fate plasticity.