It is well known that chemotherapy induces cytomorphological changes in neoplastic and non-neoplastic tissue. Thirty-one stage III breast-carcinoma patients, treated with both pre-operative chemotherapy and mastectomy, were evaluated to define the effects of systemic chemotherapeutic agents in tumours, non-neoplastic breast tissue, and lymph nodes. Histological changes were compared with those observed in patients who had been treated by surgery alone. Cytoplasmic vacuolization was the most striking change in the tumour cells (59%). Chemotherapy was especially effective in the terminal duct lobular unit in non-neoplastic breast tissue. Lobular atrophy was observed in 20 (65%) cases, and lobular cellular atypia was seen in 16 (52%). The rate of ductal cellular atypia (42%) was not different from the control group. The most important changes seen in the non-neoplastic stromal component were fibrosis and hyalinization. These were found in 31 out of 727 evaluated lymph nodes. In serial sections, metastatic deposits were seen in or around these fibrotic or hyalinized areas. Chemotherapy is widely used in the treatment of early and locally advanced breast carcinomas. Familiarity with chemotherapy induced changes in breast tissue and lymph nodes have considerable importance in the accurate interpretation of these specimens.