Curative resection cannot ensure long-term survival for patients with distal bile duct cancer. The aim of this study was to determine the most frequent mode of recurrence after curative resection and to analyse its risk factors. Clinical details for 64 consecutive patients with distal bile duct cancer who underwent surgical resection between 1980 and 1997 were reviewed. Modes of recurrence and clinicopathological findings were analysed based on the residual tumour (R) classification. The overall actuarial 5-year survival rate was 32 per cent. Of 42 patients undergoing R0 resection 10 were alive at 5 years, of 17 having R1 resection one was alive at 5 years, and none of the five patients having R2 resection survived for 5 years (R0 versus R1, P = 0.02). In the R0 group, the incidence of liver recurrence (14 of 42 patients) was similar to that in the R1 resection group (six of 17), although there were fewer lymph node and peritoneal recurrences than in patients who had R1 resection (P < 0.05). The high-risk factor for liver metastasis was microscopic vascular involvement. Important factors for survival were lymph node metastasis, microscopic vascular involvement and age. In addition, microscopic vascular involvement was the only independent factor for survival in the R0 group. R0 resection provided significant survival benefit but had no effect on liver recurrence. Therefore, new agents or strategies to prevent liver metastasis are necessary for improvement of survival.