Azimuthally aligned breakouts in oil wells are explained as shear fractures in the zone of amplified stress difference near the borehole, in a stress field having unequal horizontal principal stresses. Brittle fracture theory, on the Mohr–Coulomb failure criterion, shows that the fractures will propagate from the wall and cause wide spalled zones observable with the four-arm dipmeter. In homogeneous rock, breakouts formed in this way should lengthen the diameter by no more than 8–10%. The breakouts occur near the ends of the diameter parallel to the smaller horizontal stress. Tensile fractures may occur in the orthogonal azimuth, but are unlikely to be seen by the four-arm dipmeter calipers.Three examples are given of principal stress orientations inferred from borehole breakouts. At Rangely, Colorado, breakout azimuths suggest an approximately east–west principal compression in agreement with results obtained previously from direct stress measurements, hydrofracture, and earthquake mechanism analysis. In the east Texas Basin, north-northwest to northwest aligned breakouts suggest maximum horizontal stresses oriented at right angles to these directions. This is consistent with inferences from recent extensional faulting and one hydraulic fracture determination. In the Norman Wells area of northern Canada, northwest–southeast aligned breakouts suggest a contemporary horizontal principal compression closely parallel to natural, probably hydraulic fractures of Laramide age in a subsurface limestone reservoir. The inferred principal stress axes are consistent with the structural evolution of this area, and extend the evidence for coherent stress orientation in western Canada from southern Alberta to Norman Wells, a distance of 1900 km.