Background: Neoadjuvant aromatase inhibitor therapy has been reported to improve surgical outcomes for postmenopausal women with clinical stage II or III hormone receptor-positive breast cancer. A multicenter phase II clinical trial was conducted to investigate the value of this approach for US surgical practice. Study Design: One hundred fifteen postmenopausal women with >2 cm, estrogen receptor (ER) or progesterone receptor (PgR)-positive breast cancer were enrolled in a trial of 16 to 24 weeks of letrozole 2.5 mg daily before operation. Results: One hundred six patients were eligible for primary analysis, 96 underwent operations, 7 received chemotherapy after progressive disease, and 3 did not undergo an operation. Baseline surgical status was marginal for breast-conserving surgery (BCS) in 48 (45%), 47 were definitely ineligible for BCS (44%), and 11 were inoperable by standard mastectomy (10%). Overall Response Evaluation Criteria In Solid Tumors clinical response rate in the breast was 62%, with 12% experiencing progressive disease. Fifty percent underwent BCS, including 30 of 46 (65%) patients who were initially marginal for BCS and 15 of 39 (38%) patients who were initially ineligible for BCS. All 11 inoperable patients successfully underwent operations, including 3 (27%) who had BCS. Nineteen percent of patients undergoing mastectomy had a pathologic T1 tumor, suggesting that some highly responsive tumors were overtreated surgically. Conclusions: Neoadjuvant aromatase inhibitor improves operability and facilitates BCS, but there was considerable variability in responsiveness. Better techniques to predict response, determine residual tumor burden before operation, and greater willingness to attempt BCS in responsive patients could additionally improve the rate of successful BCS.