OBJECTIVE: We aim at determining the prognostic value of squamous differentiation in patients with transitional cell carcinoma (TCC) of the bladder that were treated with radical cystectomy. MATERIALS AND METHODS: From January 1993 to January 2005, we retrospectively selected 113 patients. Correlations among squamous differentiation with other clinical and pathological features were assessed by both chi-square and Fisher tests. The Kaplan-Meier method was used to evaluate survival curves and statistical significance was determined by the log-rank test. Multivariate analysis was performed through a Cox proportional hazards regression model. RESULTS: Squamous differentiation was observed in 25 (22.1%) of the 113 patients. This finding was significantly related only to the pathological stage. Mean follow-up after cystectomy was 31.7 ± 28.5 months. Disease recurrence occurred in 16 (64%) and 30 (34%) patients with and without squamous differentiation (log-rank test, p = 0.001), and mortality occurred in 10 (40%) and 14 (16%) of the patients with and without squamous differentiation respectively. Univariate analysis revealed that pathological stage, squamous differentiation, tumor size and lymph node involvement were significant predictors of cancer-specific survival. However, only squamous differentiation and tumor size were independent prognostic variables on multivariate analysis. CONCLUSIONS: Squamous differentiation was an independent prognostic factor for cancer specific survival in patients with bladder cancer treated with radical cystectomy. Further studies with a larger number of patients are necessary to confirm these results.