OBJECTIVE To determine the true incidence and possible aetiology of impotence following transurethral prostatectomy. METHODS Over a 9-month-period 268 patients who were about to undergo transurethral prostatectomy were interviewed about their sexual function. Full details of each operation were recorded including size of prostate, operative time, grade of surgeon and the occurrence of capsular perforation. The interviews were repeated by letter or telephone 3 months after operation. RESULTS Of the 268 men interviewed, 246 (91.8%) were suitable for inclusion in the study. Pre-operatively, 137 (55.7%) were fully potent, 43 (17.5%) could achieve a partial erection and 66 (26.8%) were impotent. Of the fully potent patients, 20 (14.6%) became partially potent and four (2.9%) became impotent post-operatively. Of those who were partially potent before operation, 16 (37.2%) became impotent post-operatively. Overall, the risk of impotence was 28.1% if the prostate capsule was breached at operation but only 10.0% if it was not (P < 0.01). CONCLUSIONS In fully potent men the risk of impotence after transurethral prostatectomy is fairly low, but it is higher in men who already have a degree of erectile failure. The risk of impotence is related to the incidence of capsular perforation at the time of surgery.