Prolactin is an important endocrine activator of lactogenesis. This study investigated the function and mechanism of miR‐135b in the enhancement of lactation by prolactin in goat mammary epithelial tissue. We utilized S‐Poly (T) sequencing to evaluate changes in gene regulation in the goat mammary gland after incubation with 2.5 μg/ml prolactin and 2.5 μg/ml IGF‐1 by examining highly expressed miRNAs during early lactation and late‐lactation. The results illustrated that miR‐135b is highly expressed in the goat mammary gland during early lactation and late‐lactation, and also after treatment with 2.5 μg/ml prolactin and 2.5 μg/ml IGF‐1. We used Q‐RT PCR, Western Blot, immunofluorescence, and luciferase reporter assay analysis, and found that PRL was significantly down‐regulated in response to the expression of miR‐135b in a manner that was functionally related to TAG synthesis via the large tumor suppressor 2 gene (Lats2), an important regulator of adipocyte proliferation via Hippo Signaling. Furthermore, using bisulfite‐sequencing PCR (BSP), Q‐PCR, and Western Blot we discovered an increase in expression of DNMT I (DNA methyl transferase I) in goat mammary epithelial cells with the 2.5 μg/ml PRL incubation, which led to DNA methylation of the CpG island upstream of miR‐135b and inhibited the transcription and expression of miR‐135b. This study clarified the mechanism by which PRL induces milk formation and identified a role of miR‐135b in this process. With PRL stimulation, the expression of DNMT I in mammary epithelial cells increased, resulting in DNA methylation of the CpG island upstream of miR‐135b's, thus inhibiting transcription of miR‐135b. At the same time, down‐regulation of miR‐135b resulted in increased expression of the target gene LATS2 thereby causing proliferation and metabolic changes in the mammary gland, eventually leading to lactation.