Neoadjuvant chemotherapy (NAC) is increasingly being used in the treatment of locally advanced breast cancer as well as for early breast cancer. Axillary lymph node dissection has been the standard method of staging the axilla in the neoadjuvant setting. Since the sentinel lymph node biopsy was introduced in the early 1990s, less invasive approaches to axillary staging in patients undergoing neoadjuvant therapy have been proposed. In this review, we discuss the effects of NAC, the imaging modalities that have been used to evaluate the axillary lymph nodes, and the role and timing of sentinel lymph node biopsy in the neoadjuvant setting. Finally, we propose a treatment algorithm for patients undergoing NAC on the basis of the current data.