Although the presence of axillary node metastases in breast cancer is a key prognostic indicator and may influence treatment decisions, a significant proportion of patients diagnosed as axillary node negative (ANN) using standard histopathological techniques may have occult nodal metastases (OMs). A combination of limited step-sectioning (4 x 100 microns intervals) and immunohistochemical staining (with cytokeratin (MNF.116) and MUC1 (BC2) antibodies) was used to detect OM in a retrospective series of 208 ANN patients. OMs were found in 53 patients (25%), and both step-sectioning and immunohistochemical detection significantly improved detection (P < 0.05). Detection using BC2 (25%) was superior to MNF.116 (18%) and haematoxylin and eosin (H&E) (8%). OMs were found in 51 patients using only the first and deepest sectioning levels and BC2 staining. OMs were more frequently found in lobular (38%) than ductal carcinoma (25%), and more frequently in women less than 50 years (41%) than in older women (19%). Univariate overall and disease-free survival analyses showed that the presence, size and number of OM had prognostic significance as did tumour size (disease-free only) and histological and nuclear grade (P > 0.05). Cox multivariate proportional hazard regression analyses showed that the presence and increasing size of OMs were significantly associated with poorer disease-free survival, independently of other prognostic factors (P < 0.05). However there was not a significant independent association of the presence of occult metastases with overall survival (P = 0.11). These findings have important implications with regard to selection of ANN patients for adjuvant therapy.