Mammary stroma plays an important role in facilitating the neoplastic transformation of epithelial cells, modulating integrity of the extracellular matrix, and maintaining genomic stability, but molecular mechanisms by which stroma affects epithelial structure and function are not well-defined. We used laser-assisted microdissection of paraffin-embedded breast tissues from 30 patients with breast disease and a panel of 52 microsatellite markers defining 26 chromosomal regions to characterize genomic patterns of allelic imbalance (AI) in disease-free tissue adjacent to sites of breast disease and to define genomic regions that may contain genes associated with early carcinogenic processes. The mean frequency of AI in histologically normal tissue adjacent to the primary carcinomas (15.4%) was significantly higher than that in distant tissue from the same breast (3.7%). The pattern of AI across all chromosomal regions differed between the adjacent tissue and primary tumor in every case. Unique AI events, observed only in tumor (15% of informative markers) or only in adjacent cells (10% of informative markers), were far more common than AI events shared between tumor and adjacent cells (approximately 4%). Levels of AI characteristic of advanced invasive carcinomas were already present in non-invasive ductal carcinomas in situ, and appreciable levels of AI were observed in adjacent non-neoplastic tissue at all pathological stages. Chromosome 11p15.1 showed significantly higher levels of AI in adjacent cells (p < 0.01), suggesting that this region may harbor genes involved in breast cancer development and progression. Our data indicate that genomic instability may be inherently greater in disease-free tissue close to developing tumors, which may have important implications for defining surgical margins and predicting recurrence.