Purpose: Arzoxifene, a new selective estrogen receptor modulator with strong breast antiestrogen activity and absence of uterine agonist activity, was explored as a potential chemoprevention agent. We performed a multi-institutional evaluation of arzoxifene in women with newly diagnosed ductal carcinoma in situ or T1/T2 invasive cancer. Experimental Design: In a Phase IA trial, 50 pre- or postmenopausal women were randomized to 10, 20, or 50 mg of arzoxifene daily in the interval between biopsy and re-excision or were enrolled as no-treatment controls. In a Phase IB trial, 76 postmenopausal women were randomized to 20 mg of arzoxifene versus matched placebo. Serum specimens collected at entry and at re-excision were assayed for various hormones and growth factors. Tissue from biopsies (estrogen receptor + and/or progesterone receptor +) and re-excision specimens was evaluated immunohistochemically for proliferation (Ki-67 by MIB-1 and proliferating cell nuclear antigen) and other biomarkers. Results: In both trials, increases in serum sex hormone binding globulin were noted, as were decreases in insulin-like growth factor (IGF)-I and the IGF-I:IGF binding protein-3 ratio (P < 0.007 versus control/placebo). For 45 evaluable women in Phase IA, decreases in proliferation indices were more prevalent for arzoxifene (particularly 20 mg) than for controls. For 58 evaluable women in Phase IB, a decrease in estrogen receptor expression for arzoxifene was observed compared with no change with placebo (P = 0.0068). However, decreases in proliferation indices for arzoxifene were not statistically different from placebo, perhaps due to a confounding effect of stopping hormone replacement therapy before entry. Conclusion: Given the favorable side effect profile and the biomarker modulations reported here, arzoxifene remains a reasonable candidate for additional study as a breast cancer chemoprevention agent.