E. Brooke Lee III, 56, the businessman whose family was instrumental in developing Silver Spring into one of Washington's first major suburbs, died of cancer March 5 at his Laytonsville home.

He was president of the family firm, Lee Development Group, and a great-great-grandson of Francis Preston Blair, who established his country estate in a wilderness area he named Silver Spring in 1842. Mr. Lee's grandfather, Col. E. Brooke Lee, was a dominant force in Montgomery County and Maryland politics for years, and his uncle, Blair Lee III, was acting governor.

E. Brooke Lee III joined the family firm in 1969, and took over as chief operating officer when his grandfather died in 1984. Lee Development built a number of subdivisions and lately has been involved in the redevelopment of Silver Spring's downtown commercial district, where he was a founding member of the Silver Spring Renaissance Committee.

Other projects included commercial developments such as the Northgate Shopping Plaza in Aspen Hill.

Mr. Lee attended American and George Washington universities, and had been working for the past two years toward a master's degree in urban design from Harvard University. He had served in the Navy Reserve.

Mr. Lee was a trustee and board treasurer of St. Mary's College of Maryland, which awarded him an honorary doctorate of law. He had been president of the Silver Spring Chamber of Commerce, director of the Montgomery County and Damascus chambers of commerce, and director of the Montgomery County Humane Society.

He was a trustee of Grace Episcopal Day School and a member of St. John's Episcopal Church in Olney, the Montgomery County Historical Society and Ducks Unlimited.

Survivors include his wife of 34 years, Anne Brittle Lee of Laytonsville; four children, E. Brooke Lee IV of Mount Airy, and Sewell Lee, Catherine Wells Lee and Camilla Lee, all of Laytonsville; his father, E. Brooke Lee of Chevy Chase; four sisters, Camilla Lee Alexander of Berkeley, Calif., Kaiulani Lee Kimbrell of Arlington, Katy Blair St. John of Essex, Mass., and Elizabeth Lee of Washington; a brother, Richard Henry Lee of Warren, Maine; and a half brother, Samuel Phillips Lee, and a half sister, Regina Lee, both of Chevy Chase.