Objectives. To prospectively evaluate our previously established pathologic risk factors in women undergoing cystectomy for bladder cancer and to determine if these criteria identify appropriate female candidates for orthotopic diversion. Methods. Prospective pathologic evaluation was performed on 71 consecutive female cystectomy specimens removed for primary transitional cell carcinoma of the bladder. The histologic grade, pathologic stage, presence of carcinoma in situ, number, and location of tumors were determined. In addition, final pathologic analysis of the bladder neck and proximal urethra was performed and compared with the intraoperative frozen- section analysis of the distal margin (proximal urethra). Results. Tumor at the bladder neck and proximal urethra was seen in 14 (19%) and 5 (7%) cystectomy specimens, respectively. Bladder neck tumor involvement was found to be the most significant risk factor for tumor involving the urethra (P < 0.001). All patients with urethral tumors demonstrated concomitant bladder neck tumors. However, more than 60% of patients with bladder neck tumors had a normal (tumor-free) proximal urethra. Furthermore, no patient with a normal bladder neck demonstrated tumor involvement of the urethra. Intraoperative frozen-section analysis of the distal surgical margin was performed on 47 patients: 45 without evidence of tumor and 2 patients with urethral tumor involvement. In all cases, the intraoperative frozen-section analysis was correctly confirmed by final permanent section. Conclusions. We prospectively demonstrate that bladder neck tumor involvement is a significant risk factor for urethral tumor involvement in women. However, despite bladder neck tumor involvement, a number of women undergoing cystectomy for bladder cancer have a normal urethra and may be candidates for orthotopic diversion. Furthermore, our data demonstrate that intraoperative frozen-section analysis of the distal surgical margin accurately and reliably evaluates the proximal urethra and currently determines which patients undergo orthotopic diversion at our institution.