Fibroadenomas and mammary phyllodes tumour arise by proliferation of mammary stroma and epithelial elements. However, it is the stromal element that determines the biology of these biphasic tumours. Normal mammary stroma, like most collagenous connective tissue, contains resident populations of CD34+ dendritic interstitial cells and scattered factor XIIIa+ collagen-associated dendrophages. Actin+myofibroblasts are usually absent from mammary stroma in non-disease states. To determine whether CD34+ and factor XIIIa+ cells proliferate in fibroadenomas and phyllodes tumours, and to study myofibroblastic differentiation in these lesions, we examined 19 fibroadenomas in 14 patients along with five low grade and two high grade phyllodes tumours. We employed antibodies against the human progenitor cell antigen CD34, coagulation factor XIIIa and HHF-35 actin. In three fibroadenomas and two phyllodes tumours, we used Ki-67 antigen to study cell proliferation and oestrogen and progesterone receptors to study possible hormonal influence on stromal cells. In all fibroadenomas, CD34 strongly stained interlobular, pericanalicular and intracanalicular fibroblasts with collagenous and/or myxoid features. Four low grade phyllodes tumours also had CD34+ fibroblasts as did one high grade tumour. Actin reactivity varied and was most pronounced in six fibroadenomas resembling the so-called cellular variant, while seven regular fibroadenomas had no actin+stromal cells and six had only focal and weak actin+stromal cells. Factor XIIIa+ cells were prominently admixed in the stroma of all tumours studied comprising from 5% to 20% in fibroadenomas and, focally, up to 50% in phyllodes tumours. Oestrogen and progesterone receptors were expressed only in glandular elements. Ki-67 index in stromal cells was 1% to 3% in fibroadenoma, 10% to 20% in low grade, and 20% to 40% in high grade phyllodes tumour. We conclude that fibroadenomas and some phyllodes tumours are composed of CD34+ fibroblasts that show varying myxoid, collagenous or myofibroblastic differentiation. The fibroblasts are accompanied by a subset of dendritic histiocytes that express factor XIIIa. Fibroadenoma variants show prominent collagenous actin+myofibroblastic differentiation of CD34+ stromal cells, sometimes with a gradient of CD34 down-regulation. Fine-needle or limited stereotactic core biopsy of these biphasic tumours, if they yield only stromal cells, must be distinguished from other CD34+ stromal tumours. Increased factor XIIIa+ dendrophage populations were seen in phyllodes tumours, especially in two high grade tumours that had malignant fibrous histiocytoma-like features, suggesting clonal evolution toward the fibrohistiocytic final pathway. Further study of CD34 and factor XIIIa+ mammary stromal cells in larger numbers of phyllodes tumours might ascertain whether increasing factor XIIIa reactivity correlates with differentiation and increased tumour aggressiveness.