Although multistate progression models for gastric cancer have been proposed, estimation of quantitative parameters of such models is yet to be done. The present study was conducted to elucidate risk factors for gastric cancer and its precursors, and to model the progression rates from superficial gastritis to gastric cancer. Data were derived from a community-based screening programme for gastric cancer in the Matzu region of Taiwan. A total of 2184 residents participated in a two-stage screening project. Subjects testing positive for Helicobacter pylori infection or pepsinogen (PGI or PII/PGII ratio) and immunoglobulin G (IgG), and subjects with a history of peptic ulcer or other upper gastrointestinal disease or with a family history of gastric cancer were referred to endoscopy. We identified 325 biopsy-proven precursors and gastric cancers, including 148 superficial gastritis (SG), 42 atrophic gastritis (AG), 117 intestinal metaplasia (IM) and two gastric cancers. Three further cancers were diagnosed on endoscopy alone and 14 were later diagnosed in those who did not comply with referral to endoscopy. A Markov process model was used to estimate the progression rates from superficial gastritis through to gastric cancer, with exponential regression to assess the effect of covariates on progression rates. The annual progression rate from SG to AG was 0.0670 (95% confidence interval [CI] 0.0446-0.0895). Annual progression rates from AG to IM and from IM to gastric cancer were 0.2775 (0.1665-0.3884) and 0.2265 (0.1315-0.3214), respectively. This gives average dwelling times in AG and IM of 3.60 years and 4.42 years, respectively. Progression from no disease to SG was significantly accelerated in those testing positive for H. pylori, those testing positive for PGI and in subjects with a family history of gastric cancer or a personal history of upper gastrointestinal disease. Further progression to AG and IM was significantly accelerated in those testing positive for PGI and in those with a history of upper gastrointestinal disease.