OBJECTIVE To assess telomerase activity (involved in cell immortalization and detectable in most malignant tumours but not in normal somatic tissues) as a marker in cancer diagnosis. METHODS Tissue telomerase activity was assayed by two different techniques, the telomeric repeat amplification protocol-polymerase chain reaction (TRAP-PCR) and a telomerase PCR-enzyme linked immunosorbent assay. Malignant and inflammatory bladder lesions and their adjacent normal tissues were assessed for telomerase activity in a group of 18 patients, 14 of whom had urothelial carcinoma and four a nonspecific inflammatory lesion of the bladder. RESULTS Eleven of the 14 tumour samples analysed were telomerase-positive and two of the three telomerase-negative tumour samples had a detectable 'telomerase inhibitor'. In the apparently normal tissues next to bladder tumours, four of the 14 specimens were telomerase-positive. Interestingly, these lesions were always next to high-grade muscle-invasive bladder tumours (pT2G3). Two of the four nonspecific inflammatory lesions (one of cystitis glandularis and one of severe dysplasia), known to be preneoplastic lesions, were also telomerase-positive. CONCLUSIONS These results strongly suggest that the reactivation of telomerase may be an early event in bladder carcinogenesis, preceding morphological changes related to malignant transformation. Telomerase activity may therefore be useful both as an indicator of malignant potential in preneoplastic lesions, e.g. cystitis glandularis and severe dysplasia, and as a prognostic marker of bladder tumour relapse or progression.