Previously, we have shown that prolactin inhibits epidermal growth factor (EGF)-induced mitogenesis in mouse mammary epithelial cells without altering the response to other growth promoting agents. This effect has been associated with reduced EGF induced EGF receptor (EGFR) tyrosine phosphorylation, Grb-2 association, and Ras activation. Our current hypothesis is that prolactin induces an alteration in EGFR kinase activity via a phosphorylation-dependent mechanism. To test this hypothesis, we treated normal murine mammary gland cells with or without 100 ng/ml prolactin. EGFR isolated by wheat germ agglutinin affinity chromatography from nontreated cells exhibited substantial ligand-induced phosphorylation, and EGFR isolated from prolactin-treated cells displayed minimal EGF-induced EGFR phosphorylation, as well as decreased kinase activity toward exogenous substrates. The observed decrease in ligand-induced EGFR phosphorylation could not be attributed to either differential amounts of EG;FR, decreased EGF binding affinity, or the presence of a phosphotyrosine phosphatase or ATPase. EGFR isolated from prolactin treated cells exhibited increased phosphorylation on threonine. Removal of this phosphorylation with alkaline phosphatase restored EGFR kinase activity to levels observed in nontreated cells. Therefore, these results suggest that prolactin antagonizes EGF signaling by increasing EGFR threonine phosphorylation and decreasing EGF-induced EGFR tyrosine phosphorylation.