Extensive literatures have shown significant trend of progressive electrical changes according to the proliferative characteristics of breast epithelial cells. Physiologists also further postulated that malignant transformation resulted from sustained depolarization and a failure of the cell to repolarize after cell division, making the area where cancer develops relatively depolarized when compared to their non-dividing or resting counterparts. In this paper, we present a new approach, the Biofield Diagnostic System (BDS), which might have the potential to augment the process of diagnosing breast cancer. This technique was based on the efficacy of analysing skin surface electrical potentials for the differential diagnosis of breast abnormalities. We developed a female breast model, which was close to the actual, by considering the breast as a hemisphere in supine condition with various layers of unequal thickness. Isotropic homogeneous conductivity was assigned to each of these compartments and the volume conductor problem was solved using finite element method to determine the potential distribution developed due to a dipole source. Furthermore, four important parameters were identified and analysis of variance (ANOVA, Yates’ method) was performed using 2 ⁿ design (n = number of parameters, 4). The effect and importance of these parameters were analysed. The Taguchi method was further used to optimise the parameters in order to ensure that the signal from the tumour is maximum as compared to the noise from other factors. The Taguchi method used proved that probes’ source strength, tumour size and location of tumours have great effect on the surface potential field. For best results on the breast surface, while having the biggest possible tumour size, low amplitudes of current should be applied nearest to the breast surface.