We recently identified activating mutations of fibroblast growth factor receptor 3 (FGFR3) in bladder carcinoma. In this study we assessed the incidence of FGFR3 mutations in a series of 132 bladder carcinomas: 20 carcinoma in situ (CIS), 50 pTa, 19 pT1, and 43 pT2-4. All 48 mutations identified were identical to the germinal activating mutations that cause thanatophoric dysplasia, a lethal form of dwarfism. The S249C mutation, found in 33 of the 48 mutated tumors, was the most common. The frequency of mutations was higher in pTa tumors (37 of 50, 74%) than in CIS (0 of 20, 0%; P < 0.0001), pT1 (4 of 19, 21%; P < 0.0001) and pT2-4 tumors (7 of 43, 16%; P < 0.0001). FGFR3 mutations were detected in 27 of 32 (84%) G1, 16 of 29 (55%) G2, and 5 of 71 (7%) G3 tumors. This association between FGFR3 mutations and low grade was highly significant (P < 0.0001). FGFR3 is the first gene found to be mutated at a high frequency in pTa tumors. The absence of FGFR3 mutations in CIS and the low frequency of FGFR3 mutations in pT1 and pT2-4 tumors are consistent with the model of bladder tumor progression in which the most common precursor of pT1 and pT2-4 tumors is CIS.