Lineage commitment studies in mammary gland have focused on identifying cell populations that display stem or progenitor properties. However, the mechanisms that control alveolar cell fate during pregnancy have been incompletely explored. We have identified a novel gene, that we called Roma, which is transcriptionally regulated by Stat6 during pregnancy. Roma is a KRAB domain zinc finger protein that is required to establish the balance between luminal alveolar pStat5- and Gata-3-expressing cells in the mouse mammary gland. Ablation of Roma resulted in accelerated alveologenesis and enhanced proliferation and this was associated with a dramatic skewing of the proportion of pStat5-expressing cells relative to Gata-3-expressing cells. This suppression of the Gata-3⁺ lineage was associated with increased expression of the inhibitor of helix-loop-helix protein Id2. Surprisingly Gata-3, which has been shown to be essential for the survival of differentiated alveolar cells, becomes dispensable in the absence of Roma as mice deficient for both Roma and Gata-3 lactate normally and pups thrive. These data suggest that the luminal alveolar compartment of the mammary gland is comprised of a number of distinct cell populations that, although interdependent, exhibit considerable cell fate plasticity. Furthermore, Roma/Gata-3 double knockout glands display a mild epithelial dysplasia and this is associated with markers of DNA damage and chromosome aberrations.