From 1977 to 1982, 13 patients with adenocarcinoma arising in the distal esophagus lined by columnar epithelium underwent esophagectomy with detailed analysis of the pathologic specimen. In three patients, microinvasive carcinoma was detected before dysplasia occurred. In five patients, the ectopic mucosa was discontinuous, prolonged cranially by islands of columnar epithelium scattered in the squamous mucosa. Variable degrees of dysplasia were found in the columnar epithelium in seven specimens in areas of intestinal metaplasia. In four patients with high-grade dysplasia, several foci of intramucosal carcinoma were identified. They were scattered over the whole length of the ectopic mucosa. These data strongly suggest that adenocarcinoma develops from dysplasia, the real premalignant lesion. Careful periodic screening must be carried out in patients identified as having Barrett's esophagus. Dysplasia may be detected and located by endoscopy with dye spraying with directed biopsies. Patients with high-grade dysplasia should undergo esophagectomy with resection of the whole ectopic mucosa because they are at high risk for development of carcinoma.