We examined pathologic specimens from 43 patients with Stage T1-T3 lesions who were treated preoperatively with four cycles of doxorubicin/cyclophosphamide, followed by segmentectomy/mastectomy and axillary node dissection (the National Surgical Adjuvant Breast and Bowel Project B-18 protocol). Specimens from 46 patients treated post-operatively with the same regimen served as histologic controls. The initial diagnosis was made by core needle biopsy (28%) or by fine-needle aspiration (72%). Six changes were noted in 36 patients (84%), with complete regression in 10, but histologic evidence of regression and characteristic cytologic changes occurred in only one-half of the 43 patients, and there was poor correlation between histologic regression and clinical response; (2) an increased nuclear grade occurred in 32% of the cases; (3) unusually prominent intraductal and/or intralymphatic tumor was observed in 40%; (4) histologic evidence of tumor regression in axillary lymph nodes was noted in nine cases; (5) regressive changes also occurred in non-neoplastic breast tissue and in lymphoid populations of lymph nodes; and (6) difficulty was noted in evaluating residual atypical intraductal proliferations. These findings add a quantitative dimension to previously published descriptions and emphasize the need for pathologic staging in these patients. In addition, they provide histopathologic evidence of downstaging in axillary lymph nodes and of relative treatment resistance by intraductal and intralymphatic tumor.