BACKGROUND: Anal smears are increasingly being used as a screening test for anal squamous intraepithelial lesions (ASILs). This study was undertaken to assess the usefulness and limitations of anal smears in screening for ASILs. METHODS: The cytomorphological features of 200 consecutive anal smears collected in liquid medium from 198 patients were studied and findings were correlated with results of surgical biopsies and/or repeat smears that became available for 71 patients within six months. RESULTS: Adequate cellularity was defined as an average of 6 or more nucleated squamous cells/hpf. A glandular/transitional component was not required for adequacy. Dysplastic cells, atypical parakeratotic cells and bi/multinucleated cells were frequent findings in ASIL while koilocytes were infrequent. Smears from LSIL cases most frequently showed mildly dysplastic and bi/multinucleate squamous cells followed by parakeratotic cells (PK), atypical parakeratotic cells (APK), and koilocytes. HSIL smears contained squamous cells with features of moderate/severe dysplasia and many APKs. Features of LSIL were also found in most HSIL smears. CONCLUSIONS: In this study liquid based anal smears had a high sensitivity (98%) for detection of ASIL but a low specificity (50%) for predicting the severity of the abnormality in subsequent biopsy. Patients with cytologic diagnoses of ASC-US and LSIL had a significant risk (46-56%) of HSIL at biopsy. We suggest that all patients with a diagnosis of ASC-US and above be recommended for high resolution anoscopy with biopsy.