Breast cancer emerges by a multistep process which can be broadly equated to transformation of normal cells via the steps of hyperplasia, premalignant change and in situ carcinoma. The elucidation of molecular interdependencies, which lead to development of primary breast cancer, its progression, and its formation of metastases is the main focus for new strategies targetted at prevention and treatment. Cytogenetic and molecular genetic analysis of breast cancer samples demonstrates that tumour development involves the accumulation of various genetic alterations including amplification of oncogenes and mutation or loss of tumour suppressor genes. Amplification of certain oncogenes with concomitant overexpression of the oncoprotein seems to be specific for certain histological types. Loss of normal tumour suppressor protein function can occur through sequential gene mutation events (somatic alteration) or through a single mutational event of a remaining normal copy, when a germline mutation is present. The second event is usually chromosome loss, mitotic recombination, or partial chromosome deletion. Chromosome loci 16q and 17p harbour tumour suppressor genes, which seem to be pathognomonic for the development or progression of a specific histological subtype. There are an overwhelming number of abnormalities that have been identified at the molecular level which fit the model of multistep carcinogenesis of breast cancer. When the functions of all of these genes are known and how they participate in malignant progression, we will have the tools for a more rational approach to diagnosis, prevention and treatment. This review deals only with the factors that are involved in the conversion of a normal breast cell into a malignant cell rather than those required for invasion and metastases. A key critical long-term step in the molecular analysis of breast cancer will be to link the specific molecular damage with the effects of environmental carcinogens.