Neoadjuvant chemotherapy (NAC) is long established as part of the multi-modality management of locally advanced breast cancer or inflammatory breast cancer, leading to significantly improved outcome. Numerous recent studies have compared the use of anthracycline-based NAC with adjuvant chemotherapy in earlier-stage disease, and have shown equivalent disease-free and overall survival rates with increased breast conservation rates. These studies have also shown that a pathological complete response after NAC is associated with improved long-term outcome. More recently, the taxanes have been introduced into clinical trials of NAC with increased overall and pCR rates. However, there is no evidence that the addition of taxanes to neoadjuvant anthracycline-based chemotherapy significantly improves long-term disease free survival or overall survival. This paper reviews these trials, as well as trials of dose-dense and trastuzumab-containing NAC regimens. The review discusses the potential for NAC to replace prolonged adjuvant trials in the assessment of new therapeutic agents (using pathological complete response as a surrogate for long-term outcome), to be used as an in vivo chemosensitivity assay to guide further treatment, and to identify molecular markers that correlate with tumour sensitivity or resistance to chemotherapeutic agents so that the treatment of patients can be individualised.