The high frequency of loss of heterozygosity (LOH) in epithelial cells of mammary ductal carcinoma in situ (DCIS) and IDC is a well known phenomenon, whereas the genetic abnormalities in the mammary stroma and its influence on the epithelial component have not been sufficiently studied. Using the PCR, we examined DNA extracts from microdissected stromal and epithelial tissues of 11 breast samples containing DCIS, including five cases associated with IDC. In each case, the mesenchymal tissue consisting of normal-appearing stroma at a distance from DCIS and IDC or stroma close to either DCIS or IDC was manually microdissected. Epithelial cells from morphologically clear-cut normal ducts and lobules, DCIS, and IDC were also microdissected. Twelve polymorphic DNA markers were tested to identify possible genetic alterations in the mesenchymal and epithelial cells on chromosomes 2p, 3p, 11q, 16q, and 17q. Samples from bilateral reduction mammoplasty from 10 women without any clinical, radiological, or pathological abnormalities were also selected as a control (reduction mammoplasty group). Whereas most cases (8/11, 73%) displayed at least one identical LOH in both epithelial and mesenchymal components, LOH at several loci was noted exclusively in stromal cells. The most frequent genetic alterations in the mesenchymal cells were at chromosomes 17q24,16q23.1–24.2, 3p14.2, and 11q21–23.2, in 87.5, 62, 60, and 45% of informative cases, respectively. The LOH frequency in the stroma close to cancer ranged from 10 to 66.5% for DCIS and from 20 to 75% of informative cases for IDC. Furthermore, 10 of the 12 polymorphic markers revealed LOH in the stroma at a distance, ranging from 11 to 57% of informative cases. None of the control cases (women without any breast disease) revealed LOH either in the epithelial or in the stromal components. Our findings strongly support the concept of stromal-epithelial interaction in the development and progression of mammary neoplasia. Furthermore, this study suggests that genetic alterations in the stromal cells may precede genotypic changes in the epithelial cells. At least in some cases, the mammary stroma in DCIS or IDC apparently represents a neoplastic interactive component rather than a reactive response to the carcinoma. The frequent allelic loss(LOH) in the mammary stroma, identified in our study, may explain some of the fibroblastic abnormalities previously observed in patients with breast carcinoma or a variety of cancer-associated hereditary diseases. We conclude that the mammary stroma may play a key role in inducing neoplastic transformation of epithelial cells, recapitulating its role in normal mammary duct development.