Chronic proton pump inhibitor (PPI) therapy may lead to partial regression of Barrett's esophagus (BE), resulting in the development of reepithelialized islands of squamous mucosa that may cover the underlying BE. The purpose of this study was to evaluate the clinical, histologic, and biologic characteristics of BE that is situated underneath squamous islands (BUSI). A total of 97 mucosal biopsies from 44 BE patients with BUSI were evaluated for a variety of histologic features (eg, type of epithelium, anatomic relationship of the underlying glands to the luminal surface, presence of adjacent mucosal glands or ducts, and the presence and degree of dysplasia), and immunostained for Ki-67, cyclin D1, and p53. BUSI was compared with adjacent areas of BE for all parameters. A clinical control group consisting of 50 BE patients without microscopic evidence of BUSI was selected for comparison of clinical and endoscopic features. The study group (34 males, 10 females; mean age, 67 years; mean length of BE, 5.5 cm) consisted of 27 (61%) and 12 (27%) patients on low- and high-dose PPI, respectively. On endoscopy, visible islands of squamous mucosa were noted in only 43% of study group patients (despite the presence of BUSI microscopically in all cases); one island was noted in 2%, multiple islands in 27%, and extensive islands in 14% of patients. The extent of squamous islands was unrelated to PPI dose. The study group was significantly more likely to have endoscopic evidence of extensive squamous islands compared with the control group (P = 0.009). Histologically, 89% of biopsies with BUSI showed intestinal-type, and 11% showed cardia-type, epithelium. Low- and high-grade dysplasia was noted in 4 (4%) and 5 (5%) biopsies, respectively. All patients with dysplasia in BUSI also showed dysplasia in other areas of the esophagus as well. Interestingly, BUSI reached the mucosal surface either by penetrating directly through, or by wrapping around, islands of squamous epithelium, in 68% of biopsies. Twenty-one percent of biopsies showed BUSI adjacent to submucosal glands or ducts. BUSI showed a significantly lower Ki-67 proliferation rate (29% vs. 49%, P < 0.001), and a lower, albeit nonsignificant, degree of cyclin D1 (16% vs. 29%) and p53 (4% vs. 17%) positivity in comparison to adjacent areas of BE. Furthermore, significantly lower proliferation rates were observed in BUSI that did not reveal an opening to the mucosal surface in comparison to foci that did. BUSI is phenotypically similar to typical surface BE but shows less severe proliferative abnormalities, particularly in buried glands that have no detectable connection to the esophageal lumen. Reduced proliferation may be due either to decreased exposure to luminal contents or to disruption of sloughing of surface epithelial cells into the crypt lumen. Prospective studies of large numbers of patients with BUSI will be required to determine the magnitude of its risk of progression to cancer.