A new serum-free defined medium was developed that supports the growth of normal rat mammary epithelial cells. Mammary organoids from the glands of female F344 rats were cultured in a serum-free medium. Monolayer culture colonies developed within a week and remained viable for months in culture. Upon subculture of one-week-old primary colonies, almost the same morphology of colonies was developed. The scrape loading/dye transfer technique showed that most of colonies that developed in a serum-free medium containing EGF, human transferrin, insulin, and hydrocortisone (basal serum-free medium, BSFM) failed to show cell-cell communication. However, colonies cultured in BSFM supplemented with prolactin, $E_2$, and progesterone (complete hormone serum-free medium, CHSFM) showed cell-cell communication at 14 days of primary culture or of subculture. By flow cytometry with FITCPNA and PE-anti-Thy-1.1 monoclonal antibody, we distinguished four RMEC subpopulations in cultures in both media: Thy-1.1+ cells, PNA+ cells, cells negative to both reagents and cells positive to both reagents. It is likely that combined prolactin, cortisol, and insulin in CHSFM stimulate terminal differentiation of clonogenic cells.