Inverted papilloma (IP) is a proliferative lesion of the epithelium lining the sinonasal tract. Although IP often recurs after surgical excision and is sometimes associated with squamous cell carcinoma of the sinonasal cavity (SNSCC), its presumed neoplastic nature and putative role as a precursor to squamous cell carcinoma have not been confirmed at the molecular genetic level. We analyzed the pattern of X chromosome inactivation in IPs from nine female patients. Inactivation of a single allele is seen in monoclonal proliferations and may be indicative of a neoplastic process. We also analyzed 28 IPs and 6 concurrent SNSCCs for loss of heterozygosity (LOH) on chromosomal arms 3p, 9p21, 11q13, 13q11, and 17p13. Losses at these loci occur frequently during neoplastic transformation of the upper respiratory tract and can be detected in squamous cell carcinomas and the progenitor lesions from which they arise. X chromosome analysis was informative in four of the nine IPs. All four lesions demonstrated a monoclonal pattern of inactivation. LOH was not detected in any nondysplastic areas from the 28 IPs, but LOH at one or more chromosomal loci was present in all six of the concurrent SNSCCs. We conclude that IPs are monoclonal proliferations, yet they do not fit the profile of a prototypic precursor lesion. Unlike squamous epithelial dysplasia, IPs do not routinely harbor several of the key genetic alterations that are associated with malignant transformation of the upper respiratory tract.