A particular application of interest for tissue reflectance spectroscopy in the UV-Visible is intraoperative detection of residual cancer at the margins of excised breast tumors, which could prevent costly and unnecessary repeat surgeries. Our multi-disciplinary group has developed an optical imaging device, which is capable of surveying the entire specimen surface down to a depth of 1-2mm, all within a short time as required for intraoperative use. In an IRB-approved study, reflectance spectral images were acquired from 54 margins in 48 patients. Conversion of the spectral images to quantitative tissue parameter maps was facilitated by a fast scalable inverse Monte-Carlo model. Data from margin parameter images were reduced to image-descriptive scalar values and compared to gold-standard margin pathology. The utility of the device for classification of margins was determined via the use of a conditional inference tree modeling approach, and was assessed both as a function of type of disease present at the margin, as well as a function of distance of disease from the issue surface. Additionally, the influence of breast density on the diagnostic parameters, as well as the accuracy of the device, was evaluated. © 2010 Copyright SPIE - The International Society for Optical Engineering.