To better understand early steps in human breast carcinogenesis, we examined allele imbalance or loss of heterozygosity (LOH), in co-existing normal-appearing breast epithelium and cancers. We microdissected a total of 173 histologically normal ducts or terminal ductolobular units (TDLUs) and malignant epithelial samples from 18 breast cancer cases, and examined their DNA for LOH at 21 microsatellite markers on 10 chromosome arms. Fourteen of 109 (13%) normal ducts/TDLUs, from 8 of 18 (44%) cases, contained LOH. The location of these 14 ducts/TDLUs appeared unrelated to distance from the cancer. LOH in normal-appearing epithelium involved only single markers, whereas LOH in cancers commonly encompassed all informative markers on a chromosome arm. In only 1 of 14 (7%) ducts/TDLUs with LOH, was the same LOH seen in the co-existing cancer. Global differences in LOH per arm in normal-appearing tissue were not demonstrated, but less LOH was seen at 11q and 17p than at 1q (P ‫؍‬ 0.002), 16q (P ‫؍‬ 0.01), and possibly 17q (P ‫؍‬ 0.06). These results indicate that in a large fraction of women with breast cancer, histologically normal breast epithelium harbors occult aberrant clones. Individual clones rarely are precursors of co-existing cancers. However, they might constitute a reservoir from which proliferative lesions or second cancers develop once additional genetic abnormalities occur, they could contribute to intratumoral genetic heterogeneity, and they are consistent with a role for genetic instability early in tumorigenesis. Breast cancers, even carcinoma in situ (CIS), the earliest recognized breast malignancy, contain numerous genetic abnormalities.