Mammary epithelial stem cells are vital to tissue expansion and remodeling during various phases of postnatal mammary development. Basal mammary epithelial cells are enriched in Wnt-responsive cells and can reconstitute cleared mammary fat pads upon transplantation into mice. Lgr5 is a Wnt-regulated target gene and was identified as a major stem cell marker in the small intestine, colon, stomach, and hair follicle, as well as in kidney nephrons. Here, we demonstrate the outstanding regenerative potential of a rare population of Lgr5-expressing (Lgr5+) mammary epithelial cells (MECs). We found that Lgr5+ cells reside within the basal population, are superior to other basal cells in regenerating functional mammary glands (MGs), are exceptionally efficient in reconstituting MGs from single cells, and exhibit regenerative capacity in serial transplantations. Loss-of-function and depletion experiments of Lgr5+ cells from transplanted MECs or from pubertal MGs revealed that these cells are not only sufficient but also necessary for postnatal mammary organogenesis.