Prolactin (PRL) is critical for alveolar proliferation and differentiation in normal mammary development and is also implicated in breast cancer. PRL influences cell proliferation and growth by altering the expression of cyclin D1. Cyclin D1 expression is directly regulated by PRL through the Janus kinase 2 (JAK2)/signal transducer and activator of transcription 5-mediated transcriptional activation of the cyclin D1 promoter. A p21-activated serine-threonine kinase (PAK)1 has also been implicated in the regulation of cyclin D1 gene expression. We have previously demonstrated that JAK2 directly phosphorylates PAK1 and extend these data here to demonstrate that PAK1 activates the cyclin D1 promoter in response to PRL. We show that mutation of PAK1 Tyr 153, 201, and 285 (sites of JAK2 phosphorylation; PAK1 Y3F) decreases both PAK1 nuclear translocation in response to PRL and PRL-induced cyclin D1 promoter activity by 55%. Mutation of the PAK1 nuclear localization signals decreases PRL-induced cyclin D1 promoter activity by 46%. A PAK1 Y3F mutant lacking functional nuclear localization signals decreases PRL-induced cyclin D1 activity by 68%, suggesting that there is another PAK1-dependent mechanism to activate the cyclin D1 promoter. We have found that adapter protein Nck sequesters PAK1 in the cytoplasm and that coexpression of both PAK1 and Nck inhibits the amplifying effect of PRL-induced PAK1 on cyclin D1 promoter activity (95% inhibition). This inhibition is partially abolished by disruption of PAK1-Nck binding. We propose two PAK1-dependent mechanisms to activate cyclin D1 promoter activity in response to PRL: via nuclear translocation of tyrosyl-phosphorylated PAK1 and via formation of a Nck-PAK1 complex that sequesters PAK1 in the cytoplasm.