There are now a number of highly effective options for the treatment of hormone-receptor-positive breast cancer. Although tamoxifen was the standard hormonal treatment for many years, we now have another option for postmenopausal women: the third-generation aromatase inhibitors (AIs) anastrozole, exemestane and letrozole. A number of trials have investigated the use of third-generation AIs compared with tamoxifen throughout the continuum of treatment settings for postmenopausal women with breast cancer. In the neoadjuvant setting, letrozole, given for 4 months, resulted in better overall clinical response and breast-conserving surgery rates than tamoxifen. The Immediate Preoperative Anastrozole Tamoxifen or Combined with Tamoxifen trial gave anastrozole for 3 months with no difference in clinical response but significantly improved breast-conserving surgery rates. Compared with tamoxifen, anastrozole and letrozole significantly improved disease-free survival as early adjuvant treatment for hormone-receptor-positive disease. Switching to anastrozole or exemestane after 2 to 3 years of adjuvant tamoxifen for a total of 5 years of therapy was also more effective than continued tamoxifen. All three agents are approved in the early adjuvant or switching setting in the USA. Letrozole following 5 years of tamoxifen as extended adjuvant treatment improved disease-free survival and, in the node-positive subgroup, overall survival when compared with placebo. Anastrozole and letrozole are both approved for the first-line treatment of hormone-sensitive advanced breast cancer in postmenopausal women; letrozole showed an improved response rate compared with tamoxifen. Anastrozole, letrozole and exemestane are all indicated for the second-line treatment of advanced breast cancer. In summary, third-generation AIs have been shown to have superior efficacy over tamoxifen in the metastatic, neoadjuvant and adjuvant settings and to improve outcome as extended adjuvant therapy following 5 years of tamoxifen. Ongoing studies will further define the role of sequential adjuvant treatment. Appropriate duration of treatment is another important area of investigation. This review will cover hormonal therapy for postmenopausal women with breast cancer and will not address the treatment of premenopausal women.