Urinary cytology is increasingly accepted as a diagnostic tool in the detection and follow-up of patients with bladder cancer. Its potential value has been reduced, however, by the relative inexperience of most pathologists in the examination of urinary specimens, and by the lack of cellular criteria specifically reflecting the morphology of low-grade papillary and flat lesions of bladder epithelium. The cytologic features of urothelial lesions, including papillary transitional cell carcinomas and flat urothelial dysplasias have been studied in both experimental systems and clinical situations and their application to a selected patient population is presented. Overall, the cytohistologic correlation for patients with bladder cancer was 92%. Positive cells reflecting the morphology of the tumor occurred in 62% of patients with grade I transitional cell carcinomas, and cells suspicious for malignancy were identified in an additional 14% of these individuals. Using the criteria presented, a positive cytology can correlate with a papillary grade I bladder tumor, and should not necessarily indicate the presence of another neoplasm. Dysplastic cells in cytologic specimens are often identified in patients having urothelial dysplasia as the most serious bladder lesion, but the cytologic diagnosis of dysplasia may represent an under-interpretation of a low-grade papillary bladder tumor. The cells of urothelial neoplasms, including low-grade transitional cell carcinomas and dysplasias, differ morphologically both from normal and reactive/reparative elements, and can be detected in cytologic samples. The changes are often subtle and require experience and a cautious approach for accurate interpretation.