In this paper we present a Transmission Line Matrix (TLM) algorithm for the simulation of electromagnetic wave interaction with a Debye dispersive medium. This new formulation is based on the use of the polarization currents in the medium. The auxiliary differential equation (ADE) method is considered to deal with dispersion after the classical discretization. The accuracy and efficiency of this approach were tested on 1D Debye medium by calculating the reflection coefficient on an air-dielectric interface. The potential of the developed algorithm to model the existence of tumors in a human breast is also demonstrated. The obtained results compared with the analytic model show a good agreement. The number of operations needed for each iteration has been reduced, hence the computational time in comparison with time convolution techniques, while maintaining a comparable numerical accuracy.