Objective To compare the erectile function (EF) and sexual desire (SD) in men after radical cystoprostatectomy (RCP) who had either an ileal conduit urinary diversion or orthotropic ileal neobladder substitution. Materials and Methods Eighty one sexually active men with bladder cancer were enrolled in this prospective study. After RCP according to patients' preferences they underwent either ileal conduit urinary diversion (n = 41) or orthotropic ileal neobladder substitution (n = 40). EF and SD were assessed using International Index of Erectile Function (IIEF) questionnaire. Patients were assessed at 4-week before surgery and were followed up at 1, 6, and 12-month postoperatively using the same questionnaire. Results Postoperatively the EF and SD domains deteriorated significantly in both groups, but in a small proportion of the patients submitted to ileal neobladder they gradually improved with time (P = 0.006). At 12-month postoperative period, 4 (9.8%) and 14 (35.0%) patients in ileal conduit and ileal neobladder groups were able to achieve erections hard enough for vaginal penetration and maintained their erection to completion of intercourse, respectively (P = 0.006). Among patients in the ileal conduit and ileal neobladder groups, additional 4 (9.8%) and 7 (17.1%) patients were able to get some erection, but were unable to maintain their erection to completion of intercourse (P = 0.02). At 12-month follow up period 24.4% of the ileal conduit and 45.0% of the ileal neobladder patients rated their sexual desire very high or high (P = 0.01). Conclusion When performed properly, orthotopic ileal neobladder substitution after RCP offers better long-term results in terms of EF and SD.