It is widely accepted that disruption of the hedgehog-patched pathway is a key event in development of basal cell cancer. In addition to patched gene alterations, p53 gene mutations are also frequent in basal cell cancer. We determined loss of heterozygosity in the patched and p53 loci as well as sequencing the p53 gene in tumors both from sporadic and hereditary cases. A total of 70 microdissected samples from tumor and adjacent skin were subjected to PCR followed by fragment analysis and DNA sequencing. We found allelic loss in the patched locus in 6/8 sporadic basal cell cancer and 17/19 hereditary tumors. All sporadic and 7/20 hereditary tumors showed p53 gene mutations. Loss of heterozygosity in the p53 locus was rare in both groups. The p53 mutations detected in hereditary tumors included rare single nucleotide deletions and unusual double-base substitutions compared to the typical ultraviolet light induced missense mutations found in sporadic tumors. Careful microdissection of individual tumors revealed genetically linked subclones with different p53 and/or patched genotype providing an insight on time sequence of genetic events. The high frequency and co-existence of genetic alterations in the patched and p53 genes suggest that both these genes are important in the development of basal cell cancer.