The incidence of ovarian atypical endometriosis and its association with malignant epithelial tumours in a consecutive series of cases during the period 1987 to 1995 were studied. Atypical glandular changes were observed in four (1.7%) of 255 ovarian endometriosis cases and one patient with ovarian atypical endometriosis developed subsequent endometrioid carcinoma in the abdominal wall. Fifty-four (24.1%) of the 224 ovarian cancers were associated with ovarian endometriosis; 21 with typical and 33 with atypical endometriosis. Clear cell carcinomas and endometrioid carcinomas were most frequently associated with endometriosis, with 54% (27 of 50 cases) and 41.9% (13 of 31), respectively. Atypical endometriosis was found in 18 clear cell carcinomas, in seven endometrioid carcinomas, in four serous carcinomas, in three mucinous borderline tumours, and in one serous borderline tumour. In 13 cases, the atypical endometriosis was in contiguity with malignant epithelial tumours. We consider that atypical endometriosis possesses a precancerous potential or is most frequently associated with clear cell and endometrioid carcinomas. Close screening of cellular atypia or hyperplasia in ovarian endometriosis and careful long-term follow-up of patients with atypical endometriosis is required.