The morphological analysis of breast cancer development indicates this to be a multistep process that progressively evolves from ductal hyperplasia and atypical ductal hyperplasia, which represent the initial stages of neoplastic growth, to carcinoma in situ, invasive carcinoma, and ultimately metastasis, as has been documented for a number of other malignancies. The understanding of the cellular and molecular processes that lead a normal cell to malignancy requires the analysis of pure populations of human breast epithelial cells (HBEC) representing specific stages of neoplastic progression. The neoplastic transformation of HBEC in vitro represents a successful model for obtaining knowledge about the molecular and biological alterations that may contribute to the tumorigenic mechanisms. We present here a current understanding of chemically transformed HBEC in the following aspects: (1) factors affecting the transformation of HBEC such as immortalization; (2) new targets for studying the mechanism of cell immortalization such as alterations in telomerase activity, differential expression of cell cycle-dependent genes, and others recently isolated through differential cloning, such as H-ferritin, and a calcium binding protein; (3) genetic mechanisms underlying cell transformation; and (4) application of the microcell-mediated chromosome transfer technique as an approach to testing the functional role of specific genes whose dysregulation or loss of function may contribute to the ultimate cell transformation. Further efforts in this cell system will be directed to determining the roles of identified molecular changes as well as the mapping/cloning of tumor suppressor or senescence genes.