Carcinoma is an important complication of ulcerative colitis (UC) and develops from dysplastic precursor lesions. Genetic changes involved in the malignant transformation have not been fully characterized. We studied 19 cases of UC with high-grade dysplasia (HGD) and eight samples of associated carcinoma (CA). Microdissection of normal epithelium, epithelium at the site of chronic inflammation, HGD, and CA was performed. Polymerase chain reaction (PCR) amplification for loss of heterozygosity (LOH) of the following polymorphic microsatellites of putative tumor suppressor gene loci was done: APC (5q), DCC (18q), p16 (9p), p53 (17p), and 8p12. To compare genetic alterations, 22 typical adenomas of the colon were studied with the markers for APC and pl6 gene loci. The results indicated that LOH of p16 and p53 were present in nondysplastic epithelium, HGD, and CA. However, the LOH in nondysplastic epithelium was detected in some associated HGD, but not all. Whereas LOH of p16 was present in 7 of 14 cases of HGD (50%), it was noted in only 1 of 22 adenomas (5.0%). LOH in the APC and DCC gene loci in UC was noted in HGD with associated CA, but LOH of APC was not present either in cases of nondysplastic epithelium or in HGD alone. Conversely, LOH in APC was present in 4 of 19 colonic adenomas. We conclude that LOH of p53 and p16 in nondysplastic epithelium may be associated with chronic reparative processes. These changes may lead to susceptibility to further genetic damage involving the APC and DCC gene loci in the development of dysplasia and progression of CA in UC. The low frequency of LOH in the p16 gene (9p) in adenomas compared with dysplasia in UC combined with infrequent LOH in APC gene loci in cases of pure dysplasia in UC may support this combination of markers as a clinical test for the differentiation of polypoid dysplasia from adenomas in UC.