The tumour immune microenvironment is considered to influence cancer behaviour and outcome. Using a panel of markers for innate and adaptive immune cells we set out to characterise and understand the bladder tumour microenvironment of 114 patients from a prospective multicentre cohort of newly-diagnosed bladder cancer patients, followed-up for 4.33±1.71 years. We found IL-17-positive cells were significantly increased in primary and concomitant carcinoma in situ (CIS), p<0.0001, a highly malignant lesion which is the most significant single risk factor for disease progression. Further characterisation of the tumour immunophenotype identified IL-17+ cells as predominantly mast cells rather than T-cells, in contrast to most other tumour types. Expression of the IL-17-receptor in bladder tumours, and functional effects and gene expression changes induced by IL-17 in bladder tumour cells in vitro suggest a role in tumour behaviour. Finally, we assessed the effects of IL-17 in the context of patient outcome, following intravesical BCG immunotherapy which is the standard of care; higher numbers of IL-17+ cells were associated with improved event-free survival (p = 0.0449, HR 0.2918, 95% CI 0.08762-0.9721) in patients with primary and concomitant CIS (n = 41), we propose a model of IL-17+ Mast cells mechanism of action. Thus, in the context of bladder CIS, IL-17+ mast cells predict favourable outcome following BCG immunotherapy indicative of a novel mechanism of BCG immunotherapy in UBC and could form the basis of a stratified approach to treatment.