Fortunately, babies are pretty resilient when it comes to blood-tinged milk. In fact, cracked, bleeding nipples are more of a concern for mothers than for babies. There is no need to stop breastfeeding. Identifying the cause, however, is crucial to preventing further damage. Since a poorly positioned baby is the most likely culprit, you might want to review these positioning tips. For more on sore nipples and how to treat them go here.
While blood-tinged milk can usually be traced to a damaged nipple, less common causes include intraductal papilloma (a benign tumor in a milk duct) or "rusty pipe syndrome". Rusty pipe syndrome (named for the brown color of the milk) is more likely to occur in first-time mothers. The milk gets its color from an accumulation of old blood in the milk ducts of some mothers. Rusty pipe syndrome is painless and often goes unnoticed, unless a mother expresses her milk or her baby spits out some milk. It typically appears during the last weeks of pregnancy or the first days after birth and lasts a day or two.
Continued bleeding can be a sign of breast cancer, so if the bleeding persists for more than 5–7 days or the cause of the bleeding is unclear, contact your health care provider right away.