In 200 consecutive cholecystectomy specimens excised for cholelithiasis or cholecystitis, 83% exhibited epithelial hyperplasia, 13.5%, atypical hyperplasia and 3.5%, carcinoma in situ. Carcinoma in situ was also observed in the mucosa adjacent to invasive carcinomas in 79% of 39 evaluable surgical cases and in 52.9% of 17 autopsy cases. Our findings suggest that a small number of hyperplasias of the gallbladder evolve toward atypical hyperplasia and that this progresses to in situ carcinoma which finally becomes invasive carcinoma. A simple cytologic technique is recommended for the diagnosis of atypical hyperplasia and carcinoma in situ in excised gallbladders. Preoperative identification of these two lesions in high-risk patients as well as comments on 156 invasive carcinomas are presented.