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The aim of this article is to demonstrate and characterize caprine mammary epithelial cells (CMC) immortalized with human telomerase reverse transcriptase (hTERT) gene. Five immortalized CMCs were assigned to either myoepithelial or luminal epithelial groups based on their morphology and expression of cell lineage-specific intermediate filaments. Telomeric repeat amplification protocol revealed various telomerase activities in CMCs associated with their distinct proliferation potential. Karyotypic analysis showed three CMCs retained their modal Capra hircus chromosome number (2n = 60), whereas the remaining two CMCs were abnormal at 2n = 19 and 2n = 36. CMCs with abnormal karyotypes lost p53 protein after chemical-induced DNA damage and showed anchorage-independent growth in soft agar assay. In terms of functional differentiation, luminal CMCs organized into alveolus-like structures when grown in Matrigel. Furthermore, αs1- and β-casein gene was induced in luminal CMCs in response to lacto-hormones stimulation. Together these results showed that hTERT-immortalized CMCs retained major characteristics of mammary epithelial cells, and stability of the genome is required for maintaining normal mammary epithelium function. Application of CMCs can provide valuable models to study alveologenesis and lactogenesis of mammary epithelium and test the feasibility of recombinant constructs designed for the generation of transgenic livestock.