There are two important measurements to make. These measurements are in inches and apply mainly to the North American market.
The first is the band size around the chest. Use a tape-measure around the chest just under the breast. Keep the tape level on the front and back. Add 5" to this measurement to obtain your chest band size.
The second is the cup size. You should measure around the breast at the fullest part. The difference between this measurement and your chest band size is your cup size. Each inch of difference is a cup size.
from:
http://www.phudson.com/BREAST/brasize.html
A C cup size means that a woman's chest is 3 inches bigger around her breasts than under her breasts.