Neoadjuvant systemic therapy (NST) has become part of the standard treatment of patients with locally advanced breast cancer. Patients who achieve a pathologically complete response (pCR) after NST have improved outcomes compared with patients with residual disease at the primary tumor site or the lymph nodes. Achieving a pCR after NST correlates with improved disease-free and overall survival; therefore the amount of residual disease is a prognostic predictor, and it is an area of ongoing research. In this article, we review the literature on NST to highlight the importance of pCR as a prognostic indicator. We also review the definition of pCR and describe the association between different patient and tumor characteristics, including the breast cancer subtype classification, and its response to chemotherapy. We expand on the clinical impact of residual disease and comment on the importance of quantifying it and the current treatment recommendations for patients with residual disease after NST.