Chromosomal loci exhibiting loss of heterozygosity (LOH) at high frequency in invasive breast cancer have been investigated in 'normal' breast tissue from patients with carcinoma and from reduction mammoplasty specimens. Duct-lobular units dissected from paraffin-embedded tissues and 485 'normal' luminal and myoepithelial cell clones were studied. Overall, LOH was found in normal cells in 5/10 breast cancer cases and 1/3 reduction mammoplasty specimens. LOH was identified in normal cells adjacent to and distant from the tumour. In one case, all luminal and myoepithelial samples exhibited loss of the same allele on chromosome 13q. One case in which the patient had a germline truncating mutation in the BRCA1 gene exhibited LOH on 17q in 3/33 normal clones. One of these clones showed loss of wild-type allele indicating gene inactivation. This sample also had LOH at markers on chromosomes 11p and 13q. One of 93 clones from three reduction mammoplasties showed allele loss at a locus on chromosome 13q. The identification of LOH in breast lobules suggests that they may be clonal. The demonstration of genetic alteration in luminal and myoepithelial cells provides evidence for the presence of a common stem cell for the two epithelial cell types. LOH has been demonstrated in normal tissues near and away from the carcinoma, suggesting that genetic alterations are likely to be more heterogeneous and widespread than is currently envisaged, and probably occur very early in breast development. Homozygous deletion of BRCA1 per se does not appear to provide clonal advantage.