The surgical management of labyrinthine fistulas caused by cholesteatoma remains controversial. Forty cases (41 ears) of labyrinthine fistulas were reviewed. This represented 10% of our total series of cholesteatomas in adults and children (426 ears). Clinical presentation, extent of disease, results of fistula testing and audiometric studies, and radiographic findings were analyzed. A canal wall-down procedure was performed in all but one patient. Generally an attempt was made to completely remove the cholesteatoma, to graft the fistulous area, and to reconstruct the middle ear mechanism in one stage. The matrix was preserved in patients with large fistulas where the involved ear was the only hearing one, when the matrix was adherent to the underlying optic duct, and in selected elderly persons. Long-term followup did not reveal a significant difference in hearing, degree of vertigo, or incidence of recidivism when those patients in whom the matrix was removed were compared with those in whom the matrix was preserved. The importance of recognizing the presence of a labyrinthine fistula preoperatively is stressed, along with the need to be prepared for an unexpected fistula. Operative management is described.