Target genes implicated in cellular transformation and tumor progression have been divided into two categories: proto-oncogenes (that when activated become dominant events characterized by gain of function) and tumor-suppressor genes (recessive events characterized by the loss of function). Alterations in proto-oncogenes and tumor-suppressor genes seem equally prevalent among human cancers. Multiple mutations appear to be required to conform the malignant phenotype. It is therefore conceivable that cancer be viewed fundamentally as a genetic disease entailing inherited (also called germ-line) and/or acquired (also termed somatic) mutations of genes in these two categories. Molecular studies of bladder neoplasms have identified a series of nonrandom genetic alterations affecting a particular set of oncogenes and tumor-suppressor genes. Because the modality of therapy for patients with bladder neoplasms primarily depends on morphological evaluation and clinical staging, the diagnosis carries significant consequences. However, it is well known that morphologically similar tumors presenting in any assigned stage may behave in radically different fashions, which seriously hampers the physician's ability accurately to predict clinical behavior in a given case. Recent studies have shown that inactivation of certain tumor-suppressor genes, such as RB and TP53, occur in bladder tumors that have a more aggressive clinical outcome and poor prognosis. In the present paper we review the molecular abnormalities associated with these dominant and recessive genes in bladder cancer and discuss the potential clinical use of their detection. The implementation of objective predictive assays to identify these alterations in clinical material will enhance our ability to assess tumor biological activities and to design effective treatment regimens. The need now is to translate this newly developed scientific knowledge into diagnostic and therapeutic strategies, which in turn will enhance the quality of life and prolong the survival of patients with bladder cancer.