Leukemia inhibitory factor (LIF) regulates the mature hypothalamic-pituitary-adrenal axis in vivo. In vitro, LIF determines corticotroph cell proliferation and induces POMC transcription. To explore LIF action on pituitary development, transgenic mice expressing LIF driven by the pituitary glycoprotein hormone α-subunit (αGSU) promoter were generated. Transgenic mice exhibited dwarfism with low IGF-I (29 ± 9 ng/ml vs. wild type (WT) 137 ± 16 ng/ml; P< 0.001), hypogonadism with low FSH (0.04 ± 0.023 ng/ml vs. WT 0.63 ± 0.18 ng/ml; P < 0.001), and Cushingoid features of thin skin and truncal obesity with elevated cortisol levels (86 ± 22 ng/ml vs. WT 50 ± 14 ng/ml; P = 0.002). Their pituitary glands showed corticotroph hyperplasia, striking somatotroph and gonadotroph hypoplasia, and multiple Rathke-like cysts lined by ciliated cells. LIF, overexpressed in Rathke’s pouch at embryonal day 10, diverts the differentiation stream of hormone-secreting cells toward the corticotroph lineage and ciliated nasopharyngeal-like epithelium. Thus, inappropriate expression of LIF, a neuro-immune interfacing cytokine, plays a key role in the terminal differentiation events of pituitary development and mature pituitary function.