Lobular neoplasia (LN) is an atypical proliferation of small, dyscohesive epithelial cells within the terminal duct lobular unit (TDLU), with or without pagetoid extension and encompasses both lobular carcinoma in situ (LCIS) and atypical lobular hyperplasia (ALH). LN is a non-obligate precursor of invasive breast carcinoma and the diagnosis of LN confers an increased risk of invasive carcinoma development, compared to the general population. Diagnostic challenges arise in the accurate classification of LCIS into classic, pleomorphic and florid subtypes, in distinguishing between LCIS and ductal carcinoma in situ (DCIS) and in the appropriate use and interpretation of E-cadherin immunohistochemistry. Due to the paucity of robust data on the natural history of LCIS, and hence its clinical significance, the management is often pragmatic rather than entirely evidence-based and requires a multidisciplinary approach. In this review, we discuss the clinicopathologic and molecular features of LCIS and address the key challenges that arise in the diagnosis and management of LCIS.