The effect of dietary fat on breast cancer is a longstanding and an unresolved issue. We found that 17beta-estradiol (E2) could be activated by the epoxide-forming oxidant dimethyldioxirane (DMDO) to bind DNA-forming DNA adducts both in vitro and in vivo, and to inhibit nuclear RNA synthesis. We proposed that E2 epoxidation is the underlying mechanism for the initiation of breast cancer carcinogenesis (Carcinogenesis 17, 1957-61, 1996). This report is on the transcriptional and DNA-binding properties of vegetable oils and fatty acids, and on the potentials of these compounds to prevent the formation of E2 epoxide. The results show that vegetable oils, having no effect on nuclear RNA synthesis either before or after DMDO treatment, were all able to prevent the formation of E2 epoxide independent of their mono- or polyunsaturated fatty acid content. Similarly, unsaturated fatty acids, regardless of chain length and number of double bonds, were all able to prevent the formation of E2 epoxide as reflected by the loss of the ability of [3H]E2 to bind DNA. In contrast to vegetable oils, the results indicated that the unsaturated fatty acids palmitoleic, oleic, linoleic, linolenic and arachidonic acid could be activated by DMDO to inhibit nuclear RNA synthesis, and that the mono-unsaturated fatty acids (i.e. palmitoleic and oleic acid) were stronger inhibitors than fatty acids with more than one double bond (e.g. linoleic, linolenic and arachidonic acid). [32P]Post-labeling analysis revealed that under identical DMDO activation, the DNA adducts formed for oleic acid were 17098 adducts/10(8) nucleotides, which was 20-fold more than palmitoleic acid (815), and 120-fold more than alpha-linolenic acid (142). This result strongly suggests that oleic acid could be a potential initiating carcinogen after epoxidation.