Epithelial hyperplasia of the breast carries an increased likelihood of carcinoma development, with most lesions best understood as markers of higher risk. The indication of increased cancer risk for more worrisome or complex histologic patterns has been supported in many studies. About 25% of women who underwent biopsies in the premammographic era had well-developed hyperplastic changes associated with an elevated risk of 1.5 to 2.0 times that of the general population when age and length of time of follow-up were considered. Somewhat fewer than 5% of women had specific patterns of atypical hyperplasia (AH) that approached the criteria of carcinoma in situ (CIS). These women with AH had a risk of cancer four to five times that of the general population, or about one half the risk associated with microscopic CIS. Only ductal CIS should be considered without question to be an intrinsic precancerous lesion because of its regular association with recurrence at the site of its initial diagnosis. Further studies indicated an appreciable interaction between AH and other nonanatomic risk factors, particularly a family history of breast cancer. Also, lower dosage estrogen replacement after menopause does not affect risk in any histologically defined group. The atypical hyperplastic lesions are more common in women undergoing biopsies on the indication of mammographic calcifications than because of palpable masses. The primary therapeutic implications of these premalignant lesions are intensified breast cancer surveillance and screening for these patients. Cancer 66:1326-1335, 1990.