A cohort of 12,212 tobacco users was followed up annually to assess malignant potential of oral precancerous lesions in the Ernakulam district in Kerala, India. A total of 19 new oral cancers were diagnosed over a period of 8 years, and 15 (79%) of these arose from some preexisting precancerous lesion or condition. Nodular leukoplakia showed highest rate of malignant transformation (16% per year) as six of 13 nodular leukoplakia underwent malignant transformation over a mean follow-up period of 2.8 years. The relative risk (3243.2) compared with individuals with tobacco habits but without any precancerous oral lesion was also the highest for nodular leukoplakia. In addition, nodular leukoplakia was associated with submucous fibrosis in two patients, which progressed to oral cancer and was the clinical diagnosis for four lesions that turned out to be malignant on histopathologic examination. Nodular appearance was noted in two other precursor lesions as well. Thus, 14 of 19 oral cancers (74%) were either preceded by nodular leukoplakia and with lesions showing a distinct nodular appearance, or had the clinical appearance of nodular leukoplakia.