Crude microsomes from lactating rabbit mammary gland were incubated with prolactin. The incubation mixture was centrifuged and the supernatant was incubated with isolated mammary cell nuclei from lactating rabbits treated for 4 days by bromocryptin to antagonize prolactin and to deinduce casein gene transcription. Nuclei were incubated with HgCTP, and the newly synthesized mercurated RNA was isolated on SH-Sepharose columns. The content of beta-casein mRNA sequences in the fraction eluted with 2-mercaptoethanol was estimated with a [(3)H]cDNA probe obtained from partially purified beta-casein mRNA. The supernatant markedly stimulated beta-casein gene transcription but not 28S rRNA transcription. The same effect was obtained with other lactogenic hormones such as human growth hormone and ovine placental lactogen but was not observed with bovine growth hormone, insulin, parathyroid hormone, luteotropic hormone, or epidermal growth factor. Prolactin and human growth hormone were totally inactive when added directly to nuclei. The factor stimulating beta-casein gene transcription was also generated by membranes containing prolactin receptors such as those from liver, ovary, adrenals, and brain but not by membranes from heart, lung, and muscle, which do not bind prolactin. The factor stimulated beta-casein transcription when added to mammary nuclei from pseudopregnant or bromocryptin-treated lactating rabbits, in which the transcription rate is submaximal, but was ineffective on mammary nuclei prepared from untreated fully lactating rabbits. The factor was unable to induce beta-casein gene transcription in nuclei isolated from rabbit liver and reticulocytes. The factor did not stimulate the transcription of globin genes in nuclei isolated from reticulocytes or the transcription of mammary "housekeeping" genes evaluated by a cDNA probe prepared from total mRNA isolated from an unstimulated mammary gland. The transcription of beta-casein genes was abolished by adding alpha-amanitin to the medium in the presence or in the absence of the factor, indicating that the generation of mercurated beta-casein mRNA sequences depended upon the transcriptional activity of RNA polymerase II. The addition of the factor to the incubation mixture did not enhance total and alpha-amanitin-sensitive RNA synthesis. These data suggest that the binding of prolactin to its receptor in vitro induces the formation of a second messager, which specifically stimulates the transcription of prolactin-sensitive genes.