Background Whether submucosal fibrosis is related to ulceration and affects the outcome of endoscopic submucosal dissection (ESD) for early gastric cancer (EGC) is unknown. This study aimed to determine ESD outcome in relationship to degree of submucosal fibrosis of gastric epithelial neoplasms and to identify factors predictive of submucosal fibrosis. Methods Eight hundred ninety-one patients with 1,027 gastric epithelial neoplasms were treated by ESD from April 2005 to January 2011. Complete en bloc resection and perforation rates in relationship to degree of submucosal fibrosis (F0, no fibrosis; F1; mild fibrosis; F2, severe fibrosis) were determined during ESD, as well as degree of concordance between endoscopically observed ulceration and pathologically determined ulceration and pathological fibrosis stained with Masson's trichrome. Results The complete en bloc resection rate was significantly low and the perforation rate was high for F2 versus F0/F1 tumors. Ulceration, tumor size C30 mm, and depressed histological type were independent risk factors for severe (F2) fibrosis. No fibrosis (F0) was observed in 77 % (732/951) of endoscopically negative ulceration cases, whereas fibrosis was observed in 100 % (76/76) of endoscopically positive cases. Masson trichrome staining was weak in 97 % (710/732) of F0, moderate in 85 % (181/ 214) of F1, and strong in 100 % (81/81) of F2 cases. Conclusions Histopathological type of submucosal fibrosis predicts outcome of ESD for EGC. Endoscopic indications of F2 submucosal fibrosis are ulceration, tumor C30 mm, and macroscopic depression.