The aromatase enzyme is involved in producing the female sex hormone, oestrogen, in women who have gone through the menopause. The enzyme converts the sex hormones androstenedione (produced by the ovaries), and testosterone, into estrogen. Letrozole prevents this conversion by blocking the action of the aromatase enzyme. This causes a reduction in estrogen levels.

Most breast cancers are sensitive to estrogen, and their growth is stimulated by this hormone. By lowering the levels of oestrogen in the body, letrozole starves the breast cancer cells and stops them from growing. Letrozole is only effective in treating breast cancers that are sensitive to oestrogen (these are sometimes called estrogen receptor positive cancers).

Letrozole is only effective in postmenopausal women, since before the menopause, oestrogen is mainly produced directly by the ovaries and not by the action of the aromatase enzyme.