This article reviews recent advances in our understanding of endometriosis with special reference to its pathogenesis, recent molecular studies, and relationship to neoplasia. Pathogenetic factors include familial predisposition, immunological factors, cell adhesion factors, angiogenic factors, and hormonal factors. Recent molecular findings in endometriosis include the monoclonality of endometriotic cysts and loss of heterozygosity in the majority of cases associated with adenocarcinoma. Women with a long-standing history of endometriosis have an increased risk of ovarian cancer, most commonly endometrioid and clear cell adenocarcinomas. In these cases, there is a high frequency of atypia in the endometriosis, and the endometriosis and the associated ovarian carcinoma may show identical PTEN mutations.