The association between analgesic nephropathy and urothelial cancer, usually in the renal pelvis, is well established. We report two such patients in whom careful morphologic study of nephrectomy specimens demonstrated severe and extensive urothelial dysplasia, with focal carcinoma in situ and grossly invisible invasive tumors. In one of these patients, no gross lesion was apparent in the urothelium. These findings support the development of invasive carcinoma through a phase of carcinoma in situ caused by the action of carcinogenic analgesic metabolites in the urine. Further, they indicate the need for caution in the assessment of urinary cytologic atypia and for care in the examination of excised urothelium in those patients.