BACKGROUND: Patients with ulcerative colitis and primary sclerosing cholangitis are at high risk for colonic dysplasia and cancer. This risk approaches 50% after 25 years of colitis. Ursodiol has been shown to protect against development of colorectal neoplasia in animal models. OBJECTIVE: To assess the relationship between ursodiol use and colonic dysplasia, the precursor to colon cancer, in patients with ulcerative colitis and primary sclerosing cholangitis. DESIGN: Cross-sectional study. SETTING: University medical center. PATIENTS: 59 patients with ulcerative colitis and primary sclerosing cholangitis who were undergoing colonoscopic surveillance for colonic dysplasia. MEASUREMENTS: Use of ursodiol was assessed in all patients. The presence or absence of colonic dysplasia was evaluated by colonoscopic surveillance. Other variables assessed were age at onset and duration of ulcerative colitis; duration of primary sclerosing cholangitis; Child-Pugh classification; and use of sulfasalazine, other 5-aminosalicylic acid preparations, prednisone, cyclosporine, azathioprine, and methotrexate. RESULTS: Ursodiol use was strongly associated with decreased prevalence of colonic dysplasia (odds ratio, 0.18 [95% CI, 0.05 to 0.61]; P = 0.005). The association between dysplasia and ursodiol use remained after adjustment for sex, age at onset of colitis, duration of colitis, duration of sclerosing cholangitis, severity of liver disease, and sulfasalazine use (adjusted odds ratio, 0.14 [CI, 0.03 to 0.64]; P = 0.01). Younger age at onset of colitis was associated with an increased risk for dysplasia. CONCLUSIONS: Ursodiol use appears to be associated with a lower frequency of colonic dysplasia in patients with ulcerative colitis and primary sclerosing cholangitis. A randomized trial investigating the chemoprotective effect of ursodiol in patients with ulcerative colitis may be warranted.