Fundamental differences exist between ulcerative colitis (UC)-associated and sporadic forms of colorectal cancer, including preexisting inflammation, type of dysplasia, and timing of molecular events in carcinogenesis. Transcriptional alterations that occur in UC-associated neoplasia in the progression from normal mucosa through dysplastic epithelium to invasive cancer have not been described. We used Affymetrix U95Av2 microarrays to assess differential gene expression in the neoplastic progression of UC tissue from the colonic mucosa of individuals with benign UC, UC-dysplasia-associated lesions or masses, and UC adenocarcinoma. By correlating transcript alterations across tissue types using a mixed statistical model, we identified 699 genes exhibiting altered expression with dysplasia development. A different expression profile was observed in progression to adenocarcinoma with 392 transcripts exhibiting differential expression. There were 224 transcripts common to both dysplasia and adenocarcinoma. Most of the differentially expressed genes described herein were not previously known to play a role in neoplastic progression in UC, including transcripts affecting cell proliferation and apoptosis, signal transduction and signaling, and DNA repair. The altered expression of five transcripts was confirmed by quantitative real-time reverse-transcription polymerase chain reaction. Based on comparisons with previous studies on sporadic colorectal carcinoma, several similarities were found. There were, however, important differences that suggest that different molecular events may occur in the development of UC-associated neoplasia. Several of these genes demonstrated similar changes in dysplastic and cancerous tissue and may be involved in early cancer formation. Identification of these genes as potential clinical biomarkers may lead to improved early disease diagnosis.