Axillary lymph node (ALN) status is considered to be the single most important prognostic indicator in patients with breast cancer. It can be assessed by various radiological, pathological and surgical techniques, the most accurate being histological examination of lymph nodes after axillary lymph node dissection (ALND). This prospective study was conducted to assess the feasibility and diagnostic accuracy of preoperative ultrasound (US) and ultrasound-guided fine-needle aspiration cytology (USG-FNAC) of ALN in patients with breast cancer. Thirty patients with FNAC-proven breast cancer, planned for definitive surgery with axillary clearance, were included in this study. Ultrasonographic evaluation of the axillae of these patients was conducted for alterations in size, shape, contour and cortical morphology of lymph nodes that could reflect presence of underlying metastases. Ultrasound-guided fine-needle aspiration cytology of the ALN was done in 24 of these patients. These findings were evaluated, with the ALN status determined by histological examination after ALND. Out of the 30 patients, eight had T1, 16 had T2, five had T3, and one had T4 lesions. Ultrasound evaluation of the ALN had a sensitivity of 86.3%, a specificity of 41.6%, a positive predictive value of 79%, a negative predictive value of 50% and a diagnostic accuracy of 73.3%. Sensitivity of USG-FNAC was 78.95%, specificity was 100%, positive predictive value was 100%, negative predictive value was 55.56% and diagnostic accuracy was 83.33%. Our study concludes that preoperative USG-FNAC of ALN is a simple, minimally invasive, easily available and reliable technique for the initial determination of ALN status in patients with breast cancer. Those who are USG-FNAC positive can be directed towards ALND straight away, and only those who are USG-FNAC negative should be considered for sentinel lymph node biopsy. This will save considerable operating time, especially where facilities for sentinel lymph node biopsy (costly dye, gamma camera, nuclear medicine facilities) are restricted or not available.