DEC1, also known as SHARP-2 or Stra13, plays important roles in embryonic development, proliferation, apoptosis and cell differentiation in the mouse. DEC1 was recently identified as hypoxically induced in cDNA microarray studies of the human renal carcinoma cell line RCC4, to be regulated through hypoxia-inducible factor (HIF)-1alpha and via HIF-1alpha, able to block adipocyte differentiation. Nevertheless, its distribution and role in hypoxia and differentiation in human breast cancer are unknown. We therefore examined the pattern and level of expression of DEC1 using immunohistochemistry in whole tissue sections in normal, in situ and invasive breast carcinomas, and correlated the level of expression of DEC1 and clinicopathological factors and hypoxic tumour markers in 253 invasive carcinomas on tissue microarrays. We observed an increase in DEC1 expression during progression from normal to in situ and invasive carcinoma. Expression was not restricted to the tumour cell element but was also observed in endothelial, fibroblasts and inflammatory cells. There was a significant positive correlation between DEC1 and tumour grade (P=0.01), HIF-1alpha (P=0.04) and the hypoxically regulated gene angiogenin (P<0.0001), but no significant associations were observed with patient age (P=0.15), lymph node status (P=0.8), tumour size (P=0.3), oestrogen receptor (P=0.45), epidermal growth factor receptor (P=0.27) or Chalkley vessel count (P=0.45). There was no difference in relapse-free (P=0.84) or overall (P=0.78) survival. These findings suggest that DEC1 plays an important role in the progression to invasive breast cancer and that it may provide a mechanism by which hypoxia blocks tumour differentiation, and may contribute to a more aggressive phenotype. Reversing this phenotype may alter the biological behaviour of individual tumours.