The plasma levels of free estradiol are very low in postmenopausal women. However, concentrations of estrogens within breast tissue have been reported to be higher than in plasma and similar to plasma concentrations in premenopausal women. One mechanism by which this may occur is for breast cells to synthesize estrogens themselves and produce high concentrations locally. Thus, tumor aromatase may be a significant source of estrogen which stimulates tumor growth. To address the question of the importance of this pathway, we have investigated the expression of aromatase within the normal breast and breast cancers. Because conventional biochemical assays for measuring aromatase activity require relatively large amounts of tissue, we developed an immunocytochemical method using a monoclonal antibody to determine the expression of aromatase. The method can be applied to sections of tumors embedded in paraffin blocks as routinely prepared for pathology. Since we have previously shown that mRNA for aromatase (P450 arom) and the protein are expressed in the same cells of the human placenta, we used in situ hybridization of sequence specific probes to P450 arom mRNA in breast tissue as one method to verify the specificity of the immunocytochemical detection of the enzyme. Both immunocytochemistry and in situ hybridization identified aromatase enzyme and mRNA expression in the epithelial cells of the terminal ductal lobula units (TDLU) and surrounding stromal cells of the normal human breast, and in the tumor epithelial cells and stromal cells of breast cancers. In addition, evidence for the functional significance of tumor aromatase was indicated by a correlation between aromatase activity and expression of proliferating cell nuclear antigen (PCNA) in the tumor, and by increased thymidine incorporation into DNA in response to testosterone in tumors in histoculture which had high aromatase activity but not in those with low activity. The findings suggests that estrogen produced locally is important in enhancing proliferation of the tumor.