A fistula on the lateral semicircular canal was found in 14 (4.8 %) ears with cholesteatoma. In 11 patients with preserved inner-ear function the cholesteatoma membrane was removed, the fistula was solidly closed with fascia, bone, and again fascia. The cavity was obliterated, the meatal wall reconstructed, and tympanoplasty performed in the same stage. Ten patients obtained a hearing gain, an average of 16.8 dB, while one developed anacusis. The results show that the cholesteatoma matrix can be removed from most fistulae. In the case of large fistulae, in which the cholesteatoma matrix is adhering to or invading the fistula, there is a great risk of perceptive hearing loss. By closing the fistula with fascia and bone and using a closed technique a lasting hearing gain may be achieved.