17β-estradiol controls post-natal mammary gland development and exerts its effects through Estrogen Receptor ERα, a member of the nuclear receptor family. ERα is also critical for breast cancer progression and remains a central therapeutic target for hormone-dependent breast cancers. In this review, we summarize the current understanding of the complex ERα signaling pathways that involve either classical nuclear “genomic” or membrane “non-genomic” actions and regulate in concert with other hormones the different stages of mammary development. We describe the cellular and molecular features of the luminal cell lineage expressing ERα and provide an overview of the transgenic mouse models impacting ERα signaling, highlighting the pivotal role of ERα in mammary gland morphogenesis and function and its implication in the tumorigenic processes. Finally, we describe the main features of the ERα-positive luminal breast cancers and their modeling in mice.