Adenoma and dysplasia in the gallbladder (GB) have been reported as precancerous lesions, but the genetic evidence of this is not clearly defined. The purpose of this study was to analyze the frequencies of K-ras, p53, and p16 gene mutations, of microsatellite instability (MI) and of loss of heterozygosity (LOH) in GB cancer, dysplasia, and adenoma. Tissues from 15 GB cancers, five dysplasias around cancerous tumors, and three adenomas were collected prospectively. The mutation rates of K-ras, p53, and p16 were 20.0, 35.7, and 30.7%, respectively, in GB cancers. However, no mutations were found in dysplasia or adenoma. Reduced staining for p16 was seen in 23% of carcinomas. All of the GB carcinomas and four out of five (80%) of the dysplasias showed LOH in a minimum of one locus, but one out of three (33%) cases of adenoma displayed LOH in only one locus. All of the loci of LOH in the dysplasias, except one, showed the same patterns of allelic loss as the adjacent carcinomas. Only one dysplasia showed multiple MI. In conclusion, multiple LOH may be associated with the development of dysplasia and the malignant transformation of GB carcinoma. Gene alterations of K-ras, p53, and p16 are important steps in the malignant changes of dysplasia. However, MI seems to have only a limited role in GB cancer development.