Studies of breast tumor homogenates from women with breast cancer have demonstrated the synthesis of estrogens in situ through the enzyme aromatase. The present series of investigations sought to determine which cell type within the tumor is responsible for local estrogen biosynthesis, and whether or not the amount produced is biologically important. Accordingly, we utilized an indirect immunohistochemical scoring method (H-score) to determine the relative amount of enzyme present in tumor epithelial and stromal cells. This revealed a value of 13 for tumor stromal cells and 4.8 for the epithelial component. Contributing to this difference is the fact that a greater percentage of cells in the tumor were stromal (45%) than epithelial (37%). To obtain direct evidence that tumor stromal cells could synthesize estrogens, we isolated and grew these cells in tissue culture. Stromal cells originating from within the tumor could be stimulated by known enhancers of transcription to produce nearly as much aromatase as is found in placental microsomes. Stromal cells isolated from benign tissue distal to the tumor exhibited properties similar to those of the tumor stroma. Epithelial cells, in contrast, did not respond to these enhancers and had low levels of aromatase basally. To obtain proof of the principle that local estrogen synthesis can be biologically meaningful, we measured tumor tissue estradiol levels and growth rates in aromatase-transfected MCF-7 cells implanted into nude mice. Local synthesis resulted in tumor levels ranging from 300 to 800 pg/g and growth rates substantially higher than in non-aromatase-containing tumors. These data suggest that tumor stromal cells contribute the major portion of estrogen synthesized in tumors, and that this local synthesis can increase tumor estradiol levels and growth rates.