The risks and benefits of hormone replacement therapy (HRT) are of considerable interest and importance, especially in terms of whether they differ among subsets of women. To determine whether HRT is associated with increased risks for breast cancer and total mortality in women with a family history of breast cancer. Prospective cohort study. Population-based sample of midwestern post-menopausal women enrolled in an observational study of risk factors for cancer. Random sample of 41,837 female Iowa residents 55 to 69 years of age. Incidence rates of and relative risks for breast cancer (n = 1085) and total mortality (n = 2035) through 8 years of follow-up were calculated by using data from the State Health Registry of Iowa and the National Death Index. A family history of breast cancer was reported by 12.2% of the cohort at risk. Among women with a family history of breast cancer, those who currently used HRT and had done so for at least 5 years developed breast cancer at an age-adjusted annual rate of 61 cases per 10,000 person-years (95% CI, 28 to 94 cases); this rate was not statistically significantly higher than the rate in women who had never used HRT (46 cases per 10,000 person-years [CI, 36 to 55 cases]). Among women with a family history, those who used HRT had a significantly lower risk for total mortality than did women who had never used HRT (relative risk, 0.67 [CI, 0.51 to 0.89]), including total cancer-related mortality (relative risk, 0.75 [CI, 0.50 to 1.12]). The age-adjusted annual mortality rate for women using HRT for at least 5 years was 46 deaths per 10,000 person-years (CI, 19 to 74 deaths); this is roughly half the rate seen in women who had never used HRT (80 deaths per 10,000 person-years [CI, 69 to 92 deaths]). These data suggest that HRT use in women with a family history of breast cancer is not associated with a significantly increased incidence of breast cancer but is associated with a significantly reduced total mortality rate.