Ruth Handler, 85, the entrepreneur and marketing genius who co-founded Mattel and created the Barbie doll, one of the world's most enduring and popular toys, died April 27 at a hospital here. She died of complications from colon surgery she had undergone three months ago.

The longtime Southern California resident defied trends in the toy industry of the late 1950s when she proposed an alternative to the flat-chested baby dolls then marketed to girls.

Barbie, a teenage doll with a tiny waist, slender hips and impressive bust, became not only a best-selling toy with more than 1 billion sold in 150 countries, but also a cultural icon analyzed by scholars, attacked by feminists and showcased in the Smithsonian Institution.

Although best known for her pivotal role as Barbie's inventor, Mrs. Handler devoted her later years to a second, trailblazing career: manufacturing and marketing artificial breasts for mastectomy patients.

Herself a breast cancer survivor, she personally sold and fitted the prosthesis and, in the 1970s, crisscrossed the country as a spokeswoman for early detection of the disease when it was still a taboo subject.

Born Ruth Mosko, she was the youngest of 10 children of Polish immigrants who settled in Denver. Her father was a blacksmith who deserted the Russian army. Her mother was an illiterate woman who arrived in the United States in the steerage section of a steamship. Her mother's health was so frail that Mrs. Handler was raised by an older sister.

When she was 19, she left Denver for a vacation in Hollywood and wound up staying. Her high school boyfriend, Elliot Handler, followed her west, and they married in 1938.

When her husband made some simple housewares to furnish their apartment, Mrs. Handler persuaded him to produce more for sale. They bought some workshop equipment and launched a giftware business in their garage, making such items as bowls, mirrors and clocks out of plastic. Mrs. Handler showed the product line to local stores, and within a few years, sales reached $2 million.

In 1942, they teamed with another industrial designer, Harold "Matt" Mattson, to launch a business manufacturing picture frames. They later added a sideline making dollhouse furniture. Within a few years, the company turned profitable and began to specialize in toys. It was called Mattel, a name fashioned from the "Matt" in Mattson and the "El" in Elliot.

In the late 1950s, Elliot Handler became so preoccupied with the development of a talking doll -- eventually marketed as Chatty Cathy -- that he was of little help to his wife when she came up with an idea of her own.

Noting their daughter Barbara's fascination with paper dolls of teenagers and career women, Mrs. Handler realized that there was a void in the market. She began to wonder if a three-dimensional version of the adult paper figures would have appeal. Why not sell a doll that allowed girls, as she would later say, to "dream dreams of the future"? This doll, she mused, would have to be lifelike. In other words, she believed, it would have to have breasts.

Mrs. Handler's dream made its debut at the 1959 American Toy Fair in New York City. Named for her daughter, "Barbie Teen-Age Fashion Model" had a girl-next-door ponytail, black-and-white striped bathing suit and tiny feet that fit into open-toed heels. Mattel sold more than 350,000 the first year, and orders soon backed up for the doll, which retailed for $3. "The minute that doll hit the counter, she walked right off," Mrs. Handler said.

By the early 1960s, Mattel had annual sales of $100 million, due largely to Barbie. The company turned out new versions of Barbie annually, as well as an ever-expanding wardrobe of outfits and accessories. Soon, Barbie sprouted a coterie of friends and family: Ken, named for the Handlers' son, appeared in 1961; Midge in 1963; Skipper in 1965; and Christie, Barbie's first black friend, in 1969. The first black Barbie came much later, in 1981.

Other dolls were named for Mrs. Handler's grandchildren, including Stacie, Todd and Cheryl.

Under pressure from feminists, Barbie evolved from fashion model to career woman, including doctor, astronaut, police officer, paramedic, athlete, veterinarian and teacher.

Over the years, the toy has inspired Barbie clubs, conventions, magazines and Web sites.

The National Organization for Women and other feminists targeted Barbie in the 1970s, arguing that it promoted unattainable expectations for young girls. If Barbie was 5 feet 6 inches tall instead of 11 1/2 inches tall, her measurements would be 39-21-33. An expert once calculated that a woman's likelihood of being shaped like Barbie was less than 1 in 100,000.

(Ken was shaped somewhat more realistically: The chances of a boy developing his measurements were said to be 1 in 50.)

Mrs. Handler said she did not take offense at the feminist broadsides and often noted that successful women had played with Barbie and told her that the doll helped them realize their aspirations.

By 1970, however, Mrs. Handler's world began to change. Doctors diagnosed breast cancer, and she underwent a mastectomy. New corporate managers began to diversify Mattel away from toys, and in 1975 their machinations resulted in the Handlers' ousting from the company they had founded.

In 1978, Mrs. Handler was indicted on charges of fraud and false reporting to the Securities and Exchange Commission. She pleaded no contest, was fined $57,000 and sentenced to 2,500 hours of community service.

After being forced out of Mattel, she founded a new company. Ruthton Corp. was the result of the humiliation she had experienced when she sought to restore her appearance to its pre-mastectomy state.

The resulting Nearly Me prosthetic breast was made of liquid silicone enclosed in polyurethane and had a rigid foam backing. Mrs. Handler sold it in lefts and rights according to bra size. Her goal was to make an artificial breast so real "that a woman could wear a regular brassiere and blouse, stick her chest out and be proud."

She led a sales team of eight middle-aged women, most of whom had had breast cancer, into department stores, where they fitted women and trained sales staffs. She fit former first lady Betty Ford after her mastectomy. Her marketing tactics included talk-show appearances and handwritten invitations to breast cancer patients.

By 1980, sales of the Nearly Me artificial breast had surpassed $1 million. In 1991, Handler sold the company to a division of Kimberly-Clark Corp.

Survivors include her husband of 63 years; her daughter, Barbara; a brother; five grandchildren; and a great-grandchild.

Her son, Ken, died in 1994.

At Barbie's 40th anniversary party in 1999, Ruth Handler holds a special-issue design of the doll. Mrs. Handler also co-founded Mattel.