ARHI is a novel imprinted tumor suppressor gene. To study its function in vivo, we have developed transgenic mice that overexpress ARHI. Offspring bearing the transgene had significantly lower body weights than did nontransgenic littermates. In addition, strong expression of the ARHI transgene was associated with greatly impaired mammary gland development and lactation, failure of ovarian folliculogenesis resulting in decreased fertility, loss of neurons in the cerebellar cortex, and impaired development of the thymus. Decrease in body size and defects in the mammary glands correlated with the level of transgene expression. Immunohistochemical analysis indicated that expression of prolactin (PRL), but not growth hormone, was lower in the pituitary glands of mice with defective mammary gland development. The defect in pregnancy-associated mammary tissue proliferation was associated with decreased serum PRL and progesterone levels. Moreover, lower levels of estrogen receptor and progesterone receptor were observed in postpartum mammary glands and in the ovaries of mice that overexpressed ARHI. Our data suggest that ARHI can inhibit PRL secretion and act as a negative regulator in murine growth and development.