Intraoperative radiation therapy (IORT) has been used successfully in the treatment of malignancies, alone and as an adjunct to surgical resection. This study examined a single institution's experience with combined IORT and surgical resection in the treatment of advanced cancer. The records of 41 consecutive patients undergoing intraoperative radiation therapy (IORT) at the Fox Chase Cancer Center, from July 1987 through March 1990, were retrospectively reviewed. All patients had locally advanced disease, of whom 73% had failed previous multimodality therapy and 44% had undergone prior radiation therapy (XRT). The 2-year actuarial survival for the entire cohort was 72%. Disease-free survival was 47% at 1 year and 5% at 2 years. The only important prognostic factor predicting outcome was status of the surgical margin. Positive surgical margins decreased the 2-year actuarial survival from 100% to 59%, and increased the local failure rate from 21% to 52%. Margin status had no effect on the later development of metastatic disease. Higher IORT doses, field sizes > 7 cm, and multiple IORT fields were used for larger tumors and larger amounts of residual disease. These parameters alone did not correlate with improved local control. This analysis suggests the usefulness of aggressive surgical resection with IORT in extending survival for locally advanced or recurrent cancer. Negative margin status is the best predictor of a favorable outcome and should be used to select patients who may benefit from IORT. The use of radiation sensitizing agents should be explored in patients with positive margins, since in-field failure continues to be the major pattern of failure. IORT in conjunction with aggressive surgical resection should continue to be studied in prospective randomized clinical trials.