Purpose Women with atypical hyperplasia (AH) is associated with a higher risk of later breast cancer. However, whether AH found at margins in patients with breast-conserving surgery (BCS) and neoadjuvant chemotherapy (NAC) needs re-excision is not well-defined. The aim of the present study was to evaluate the impact of atypical hyperplasia at the surgical margins on the local recurrence and survival outcomes in breast cancer patients treated with NAC and BCS. Methods A retrospective analysis comparing patients who received NAC with AH and received no re-excision to those without AH at the margins of BCS was performed. Results 323 patients were included in this study. The 5-year rates of ipsilateral breast tumor recurrence (IBTR) were 6% and 4.5% in patients with and without AH, respectively. Distant-metastasis-free survival (DMFS) at 5 years was 81.2% in the AH group, and 88.1% in the no-AH group. No significant differences were observed among the two groups in terms of IBTR, DMFS, or OS. Conclusion Our study suggests that AH involved at the surgical margins of BCS in patients who received NAC does not increase the risk of ipsilateral breast cancer, and there is insufficient evidence for surgeon to further resect AH found at the margins of BCS in these patients.