The application of breast conserving surgery to down-staged cases with locally advanced breast cancer (LABC) after neoadjuvant chemotherapy (NACT) is still a controversial issue with a variable incidence of locoregional failures. In this study, the response of LABC to NACT was assessed pathologically and the eligible candidates for breast conserving surgery were identified retrospectively. The efficacy of preoperative clinical examination and mammography in detecting these pathological changes were also evaluated. The study included 41 LABC cases. They received NACT (FAC) and were then subjected to a mastectomy. The cases were examined clinically and by mammography before starting treatment and immediately before surgery. Residual tumours in the mastectomy specimens were correlated with the pretreatment and preoperative clinical and mammographic findings in order to assess the efficacy of these tools for detection of NACT-induced changes. After 3 cycles of NACT, 78% of women showed an objective response. However, only 25% of them would have been eligible for breast conserving surgery. The remaining responders had an increased incidence of either multifocality and or peritumoural in situ carcinoma. Both clinical examination and mammography were inadequate for detection of these chemotherapy-induced changes and hence for selecting suitable candidates for breast conservation. This study has shown that tumour regression by NACT is probably induced by a process of tumour segmentation and is associated with an increased incidence of ductal in situ lesions in the original tumour bearing area.