To clarify the clinical significance of the status of surgical margins, especially the dissected margin in the transverse direction, a clinicopathologic study was performed on 60 patients with carcinoma of the bile duct who underwent radical resection. The patients in group A (n = 28) had no cancer invasion within 5 mm of the dissected margin in the transverse direction. They had a higher incidence of the well differentiated type of carcinoma and a lower incidence of lymph node metastasis and microscopic tumor extension than the patients in group B. Group B (n = 32) included patients with cancer involvement within 5 mm of the dissected margin in the transverse direction. Some group A patients were found to have advanced carcinoma of the lower bile duct, but they were the only ones whose lesions were at an early stage (e.g., lesion restricted to subserosal involvement or less) among those with carcinoma of the hepatic duct and the upper and middle bile ducts. Local recurrence was found to occur more frequently as the tumor approached the liver, and the incidence of local recurrence was significantly higher in patients in group B than in group A (75.0% versus 28.5%). These results indicate that patients with cancer invasion within 5 mm of the surgical margin develop early recurrence of tumor even after conventional radical resection and that further radical dissection of the hepatoduodenal ligament with hepatectomy or pancreatoduodenectomy may be required to improve survival for these cases.