Chromosomal and genomic instability due to telomere dysfunction is known to play an important role in carcinogenesis. To study telomere dysfunction in the surrounding background epithelium of squamous cell carcinoma in situ (CIS) of the oesophagus, we measured telomere lengths of basal and parabasal cells of epithelia with and without CIS using quantitative fluorescence in situ hybridization (Q-FISH) and our original software, Tissue Telo. Additionally, we assessed histological inflammation and the anaphase bridge index. In non-cancerous epithelium, telomeres in basal cells were significantly longer than those in parabasal cells, whereas CIS showed a homogeneous telomere pattern in the basal and parabasal cells. Telomeres in basal and parabasal cells were significantly shorter in the background with CIS than in epithelium from age-matched normal controls. Significant negative correlation was observed between the normalized telomere : centromere ratio (reflected telomere length) and the anaphase bridge index in non-cancerous epithelia from both normal controls and the CIS background with no histological inflammation. These findings indicate that tissue stem cells may be located among basal cells, and that telomere length distribution in component cell types differs between CIS and non-cancerous epithelium. We have demonstrated conclusively that oesophageal CIS arises from epithelium with short telomeres and chromosomal instability in the absence of histological inflammation.