OBJECTIVE To assess the prognostic significance of biologic parameters such as angiogenesis, expression of cathepsin D (a lysosomal protease), and degradation of type IV collagen (a basement membrane protein), we studied 20 patients with primary grade III Stage T1 transitional cell carcinoma of the bladder. METHODS Endothelial cells were labeled immunohistochemically using factor VIII-related antigen. The vascular surface density (VSD) and the microvessel number (NVES) were assessed by means of stereology. The tumor tissues were also analyzed by immunohistochemical methods for the expression of cathepsin D and the staining pattern of type IV collagen. RESULTS Eight patients (40%) having either recurrence or progressive disease showed greater NVES and VSD values (P = 0.002 and P = 0.01, respectively) than patients without. The significance of vascular parameters was found to be statistically independent from coexisting carcinoma in situ, bacille Calmette-Guerin (BCG) treatment, tumor size, and number. Additionally, these parameters did not show statistical significance between progressive and recurrent tumors. However, tumors with solid morphologic features had higher VSD values and a significantly greater rate of recurrence or progression (P = 0.01 and P = 0.07, respectively). Tissue from 17 (85%) of 20 tumors showed absent or patchy basement membrane staining for type IV collagen, and 12 (60%) showed strong immunoreactivity for cathepsin D antibody. There were no differences for either molecule with either BCG treatment or other parameters related to prognosis. CONCLUSIONS Angiogenesis may have an independent role in predicting prognosis in grade III Stage T1 bladder carcinoma. Grade III Stage pT1 tumors with solid morphologic features have higher angiogenetic activity and a worse prognosis. Cathepsin D and type IV collagen do not seem to play a role in predicting biologic behavior.