Aim. Paclitaxel based neoadjuvant chemotherapy regimen (NAT) in the setting of locally advanced breast cancer (LABC) can render inoperable tumor (T4, N2/N3) resectable. The aim of this study was to assess the status of carcinoma in the breast and lymph nodes after paclitaxel based NAT in order to find out the patient and the tumor characteristics that correspond to the pathological responses which could be used as a surrogate biomarker to assess the treatment response. Materials and Methods. Clinical and tumor characteristics of patients with breast carcinoma (n = 48) were assessed preoperatively. These patients were subjected to modified radical mastectomy after 3 courses of paclitaxel based NAT regimen. The pathological responses of the tumor in the breast and the lymph nodes were studied by using Chevallier's system which graded the responses into pathological complete response (pCR), pathological partial response (pPR), and pathological no response (pNR). Results. Our studies showed a pCR of 27.1% and a pPR of 70.9% . Clinically small sized tumors (2-5 cms) and Bloom Richardson's grade 1 tumors showed a pCR. Mean age at presentation was 50.58 yrs. 79.2% of cases were invasive ductal carcinoma NOS; only 2.1% were invasive lobular carcinoma, their response to NAT being the same. There was no downgrading of the tumor grades after NAT. Ductal carcinoma in situ and lymphovascular invasion were found to be resistant to chemotherapy. The histopathological changes noted in the lymph nodes were similar to that found in the tumor bed. Discussion and Conclusion. From our study we conclude that histopathological examination of the tumor bed is the gold standard for assessing the chemotherapeutic tumor response. As previous studies have shown pCR can be used as a surrogate biomarker to assess the tumor response.