Residual microscopic disease after lumpectomy may cause significant local recurrence. This study evaluated the use of touch preparation cytology to assess lumpectomy margins. For 90 specimens, the findings on Diff-Quik-stained touch preparations (rendered intraoperatively within 15 minutes after the lumpectomy) were correlated with the gross findings, frozen-section results and, later, the findings in the permanent histologic sections. Three specimens were cytologically unsatisfactory, 68 yielded benign findings, and 19 were suspicious or diagnostic for malignancy. The margins showed tumor involvement in 5 lumpectomy samples by gross examination, in 13 by frozen-section evaluation and in 17 by the study of permanent sections. Touch preparation cytology was putatively falsely positive in two cases while frozen-section evaluation was falsely negative in four cases. Cytology had a sensitivity of 100%, a specificity of 97.1% and a diagnostic accuracy of 97.7%. These results demonstrate that touch preparation cytology rapidly and reliably evaluates lumpectomy margins and can overcome some sampling errors and artifacts related to frozen-section analysis. Touch preparation cytology is now being used to complement frozen-section evaluation of lumpectomy margins as part of a protocol aimed at reducing the local recurrence rate.