CEA cell adhesion molecule-1 (CEACAM1) is a cell-cell adhesion molecule that, paradoxically, is expressed in an apical location in normal breast epithelium. Strong lumenal membrane staining is observed in 100% of normal glands (11/11), low in atypical hyperplasia (2/6), high in cribiform ductal carcinoma in situ (DCIS) (8/8), but low in other types of DCIS (2/15). Although most invasive ductal carcinomas express CEACAM1 (21/26), the staining pattern tends to be weak and cytoplasmic in tumours with minimal lumena formation (grades 2-3), while there is membrane staining in well-differentiated tumours (grade 1). The 'normal' breast epithelial line MCF10F forms acini with lumena in Matrigel with apical membrane expression of CEACAM1. MCF7 cells that do not express CEACAM1 and fail to form lumena in Matrigel, revert to a lumen forming phenotype when transfected with the CEACAM1-4S but not the -4L isoform. CEACAM1 directly associates with and down-regulates the expression of beta1-integrin. Immuno-electron microscopy reveals numerous vesicles coated with CEACAM1 within the lumena, and as predicted by this finding, CEACAM1 is found in the lipid fraction of breast milk. Thus, CEACAM1 is a critical molecule in mammary morphogenesis and may play a role in the absorption of the lipid vesicles of milk in the infant intestinal tract.