Mammary gland is a unique organ that undergoes dynamic alterations throughout a female's reproductive life, making it an ideal model for developmental, stem cell and cancer biology research. Mammary gland development begins in utero and proceeds via a quiescent bud stage before the initial outgrowth and subsequent branching morphogenesis. How mammary epithelial cells transit from quiescence to an actively proliferating and branching tissue during embryogenesis and, importantly, how the branch pattern is determined remain largely unknown. Here we provide evidence indicating that epithelial cell proliferation, segregation into basal and luminal lineages that characterize the postnatal mammary duct, and onset of branching are independent processes, yet partially coordinated by the Eda signaling pathway. By performing heterotypic and -chronic epithelial-mesenchymal recombination experiments between mammary and salivary gland tissues and ex vivo live imaging, we demonstrate that unlike previously concluded, the mode of branching is an intrinsic property of the mammary epithelium while the growth pace and density of the mammary ductal tree are dramatically affected by the origin of the mesenchyme. Transcriptomic profiling of mammary and salivary gland mesenchymes and ex vivo and in vivo functional studies disclose that mesenchymal Wnt/beta-catenin signaling, and in particular IGF-1 downstream of it critically regulate mammary gland growth.