Near infrared (NIR) diffuse optical spectroscopy and imaging may enhance existing technologies for breast cancer screening, diagnosis, and treatment. NIR spectroscopy yields quantitative functional information that cannot be obtained with other non-invasive radiological techniques. In this study we focused upon the origins of this contrast in healthy breast, especially from water and lipids. Non-invasive NIR measurements were performed on the breasts of 30 healthy women using a seven-wavelength frequency-domain photon migration probe. Subjects included pre- and post-menopausal women between the ages of 18 and 64. A diffusive model of light transport quantified oxygenated and deoxygenated hemoglobin, water, and lipid by their absorption signatures. Changes in the measured light-scattering spectra were quantified by a "scatter power" parameter. Substantial quantitative differences were observed in both absorption and scattering spectra of breast as a function of age. These physiological changes were consistent with long-term hormone-dependent transformations that occur in breast. Immanent response was not adversely affected by subject age or menopausal status. The impact of neglecting water and lipids upon optical measurements in the breast is to artificially ascribe extra absorption. The effect can be significant, causing 20-30% errors in hemoglobin concentration and 5% in hemoglobin saturation. These errors cold dull the inherent contrast between normal and tumor tissue and thus affect optical mammography.