Deborah Sander had just completed extensive hospital treatment when the Kings of Wessex school, in Cheddar, Somerset, said her one-year contract would not be renewed.
Mrs Sander, who was represented by the National Union of Teachers, said: "I felt that the school were using a temporary contract as an excuse to dismiss me because I had cancer.
"I have been devastated by the way Kings of Wessex school behaved. It has affected my recovery and I have avoided even passing the school since."
She was appointed as a part-time teacher in 1998 but was diagnosed with breast cancer before she was due to start. The school confirmed it still wanted to employ her and she took up the post, as planned, in September.
She had three operations and there were occasional absences for routine treatment and surgery. On December 14, she was told she would need radiotherapy, t begin in January 1999, allowing her to return to work in March 1999. The treatment was postponed after the cancer was thought to have spread.
Mrs Sander said that she kept the school informed throughout and offered to return to work for two to three weeks, but the offer was rejected because it was thought too disruptive to pupils.
She contacted the school in May and it was at this point that the possibility of the contract not being renewed was raised.
Non-renewal of a fixed-term contract is legally defined as dismissal. If the contract is at least one year old, dismissal must be fair.
In June the school confirmed that her contract would not be renewed, but later asked her to cover a colleague's sick leave.
The school refused to comment but a Somerset County Council spokesman said:
"The council has not been directly involved in this issue as the matter was dealt with by the Kings of Wessex school.
"We will be discussing with the school the circumstances that led up to the appearance of this case at the industrial tribunal."