We have characterized a stable and functional transfectant of the rabbit prolactin receptor in Chinese hamster ovary cells, and investigated the action of prolactin (PRL) on the growth and differentiation of this transfectant (clone E32). PRL induced a significant inhibition of E32 cell proliferation. Growth inhibition correlated with gene induction of the molecular marker of ovarian differentiation cholesterol side chain cleavage P450 (P450_scc). Both effects were inversely proportional to cell confluence. The limits and potential development of such transfected cellular systems are discussed.