Several centers have identified colorectal cancer in patients with primary sclerosing cholangitis (PSC) and ulcerative colitis (UC) who have undergone orthotopic liver transplantation. Increased frequency of surveillance colonoscopy and prophylactic colectomy has been recommended. To address these concerns, we reviewed the posttransplantation experience with colorectal neoplasia in patients with PSC and UC at our institution. All patients with PSC and UC who underwent liver transplantation at Mayo Clinic between April 1985 and December 1993 were followed up through their complete history for colorectal dysplasia, cancer, or death. Eighty-one of 108 patients with PSC (75%) had concomitant inflammatory bowel disease (all but 1 had UC). Proctocolectomy had been performed before transplantation in 24 (30%). Median follow-up after transplantation was 4.2 years. Among the 57 patients with intact colons, 3 developed colorectal cancer, an incidence of approximately 1% per person per year. The cumulative incidence of dysplasia was 15% at 5 years and 21% at 8 years. Overall actuarial survival stratified by presence or absence of an intact colon at transplantation was similar (86% and 86%, respectively, at 5 years). The risk of carcinoma after transplantation compared with that expected for patients during a comparable (pretransplantation) period was increased fourfold but was not statistically significant. The risk of colorectal neoplasia (dysplasia and cancer) after liver transplantation in patients with PSC and UC is clinically important. However, this risk had no impact on patient survival. Prophylactic proctocolectomy does not appear necessary, but annual surveillance colonoscopy is recommended.