Cancer incidence varies markedly by ethnicity and geographic location. Ethnic variation in cancer occurrence has traditionally been ascribed to differences in social, cultural, economic, and physical environments. However, this interpretation of the epidemiologic evidence may need to be revised as a result of new biological evidence and theories of carcinogenesis. Carcinogenesis is now recognized to be a multistep process during which mutations or heritable changes in expression occur in genes involved in cellular growth control and genome stability. Inherited cancer susceptibility may be a stronger determinant of ethnic differences in cancer incidence than is currently appreciated. To examine the potential role of inherited susceptibility, the theoretical contribution of inherited susceptibility to ethnic differences in rates in considered using a simple probability model. Germline mutations in tumor suppressor genes BRCA1 and p53 are used to illustrate the magnitude of the ethnic differences for breast cancer that might arise from differences in inherited susceptibility. Our simple model suggests that ethnic differences in cancer occurrence can result from differences in genetic susceptibility. However, the magnitude of ethnic relative risk is likely to more strongly reflect differences in the distribution of susceptibility genotypes between groups than the magnitude of the disease risk associated with the genotypes. For many scenarios, the ethnic relative risk arising from differences in susceptibility may be bounded by the ratio of the proportion of susceptible individuals in each group.