Lactating rats were implanted, on the 3rd day post partum, with 27-gauge needles containing melted estrogen, in the mammary gland, pituitary, and the back. A clear inhibition of lactation (measured by daily litter weight gain, milk yield, and microscopical observation of the mammary gland) was observed in mothers with intramammary estrogen implants. In rats bearing estrogen in their backs, the inhibition of lactation observed is attributed to diffusion of the estrogen to the mammary tissue. Direct intrapituitary estrogen did not inhibit lactation, but on the contrary, was followed by a marked stimulation of lactation. It is concluded that the inhibitory effect of estrogen upon lactation in the rat is exerted at the mammary and not at the pituitary level. On the basis of the results obtained, the hypothesis is advanced that the steroid may alter or block the effect of oxytocin or glucocorticoids on mammary function.