Lobular intraepithelial neoplasia (LIN) is currently considered a risk factor for the development of invasive breast cancer of varying morphologies (ductal or lobular) and prognoses in either breast. The reason for the high frequency (50%) of subsequent development of invasive ductal cancers remains unclear and the issue unexplored. A total of 775 LIN cases were retrieved from the Armed Forces Institute of Pathology files and separated into three groups using our three-tiered grading system. The presence or absence of simultaneous invasive cancer (ductal or lobular type) and various grades of ductal intraepithelial neoplasia (DIN) were noted for each case and correlated with the grade of LIN. Of the 775 cases, 80% qualified as LIN 2, with the other 20% being relatively evenly split between LIN 1 and LIN 3. Of the 775 cases, 163 cases were pure LIN, while invasive carcinoma was present in 140 cases. The remaining 472 cases were associated with various grades of DIN. The frequency of associated invasive carcinomas (ductal and lobular) increased from 14% in LIN 1 to 23% in LIN 3. Remarkably, while the frequency of invasive lobular carcinoma increased dramatically from 11% in LIN 1 to 86% in LIN 3, the frequency of invasive ductal carcinoma markedly decreased with advancing grade of LIN from 89% in LIN 1 to 14% in LIN 3. Among the cases of LIN unassociated with invasive carcinoma, DIN was present in 75% of LIN 1, 75% of LIN 2, and 66% of LIN 3 cases. The grade of DIN was directly proportional to the grade of LIN. Based on the higher frequency of invasive lobular carcinoma associated with LIN 3, biopsies with LIN 3 should be evaluated diligently for the presence of an associated invasive lobular carcinoma. Furthermore, an excisional biopsy should be performed when LIN 3 is observed in a core biopsy. The high frequency of DIN associated with LIN might suggest that the subsequent invasive ductal carcinomas originate from the associated DIN and that some of this may represent a different phenotype of the same cells that form the LIN lesion. It is also possible that the neoplastic cells may reflect or retain stem cell characteristics with plasticity and the capacity to attain or progress into either a ductal or lobular invasive phenotype.