A series of in vitro and in vivo studies have been performed to establish the endocrine and clinical endpoints of the type I anti-aromatase agent exemestane in neoadjuvant therapy. In vitro studies demonstrated a dose-related inhibition of aromatase activity with exemestane, even when activity was measured in a system in which the aromatase enzyme was induced in fibroblasts preincubated with exemestane but assayed in the absence of the drug. In contrast, type II anti-aromatase agents (eg, aminoglutethimide, anastrozole, and letrozole) often caused a paradoxical increase in aromatase activity when measured under similar conditions. In vivo and in situ studies were performed in 12 postmenopausal women with untreated large or locally advanced estrogen receptor-rich tumors. The effect of exemestane 25 mg daily for 3 months on aromatization peripherally and in breast cancer and surrounding normal tissue was determined. Immediately before starting therapy, patients received an 18-hour infusion of radioactively labeled androgen and estrogen, followed by a wedge biopsy. This procedure was repeated after 3 months of treatment with exemestane, and the data were used to calculate peripheral and local aromatization. Changes in tumor volume were based on clinical examination, ultrasound, and mammography. Exemestane treatment was associated with a marked reduction in aromatization peripherally and in nonmalignant breast tissue in every patient and in breast tumor in all but one patient. Median reduction in tumor volume was 85.5% for clinical examination, 82.5% for ultrasound, and 84% for mammography. Eight of 10 patients who would have required mastectomy before treatment were able to undergo breast-conserving surgery after treatment. Clinical benefits were accompanied by a marked reduction in cellular proliferation and progesterone receptor expression. These data support the use of exemestane in neoadjuvant therapy of breast cancer in postmenopausal women.