Whether cosmetically acceptable tumor-free (>/=2 mm) surgical margins reduce the local-regional recurrence risk for patients treated with fractionated radiation therapy, chemotherapy, and hormonal therapy is unknown. The benefit of a minimum cosmetically acceptable tumor-free margin remains speculative because no contemporary studies have investigated the extent of invasive disease infiltration within the breast beyond the primary tumor. To address these clinical issues, we conducted a retrospective study of 341 women diagnosed with stage I or II invasive breast cancer to determine the rate of local in-breast, elsewhere in-breast, and ipsilateral regional lymph node recurrences of breast cancer after conservation surgery achieving either tumor-free (>or=2 mm) or close (>0 mm to <2 mm) surgical margins followed by whole breast radiation therapy over a 6-year period from January 1996 to December 2002. Women may have received adjuvant chemotherapy or hormonal therapy as clinically indicated. After a median follow-up of 56 months from the completion of breast conservation surgery, 14 of the 341 women (4.1%) developed breast cancer recurrences. Crude ipsilateral recurrence rates were 1.8% (4 of 222) for tumor-free (>or=2 mm) versus 8.4% (10 of 119) for close (>0 mm to <2 mm) surgical margins (p=0.007). The estimated 5-year cumulative local recurrence rate was significantly less for women with tumor-free margins (2.1%) as compared to close surgical margins (8.9%) (p=0.004). Multivariate analyses identified negative estrogen receptor expression (p=0.004), close surgical margins (p=0.012), and the presence of angiolymphatic invasion (p=0.040) as prognostic factors for local-regional recurrences. Microscopically the extent of invasive disease infiltration beyond the primary tumor was on average 1 mm, with all measured invasive disease less than 1 cm. Based on our findings, cosmetically acceptable tumor-free (>or=2 mm) surgical margins significantly reduce local in-breast and regional lymph node recurrences with fractionated radiation therapy, chemotherapy, and hormonal therapy.