In colorectal cancer (CRC), a proportion of patients with early stage disease still die of metastatic or recurrent disease within 5 years of “curative” resection. Detection of carcinoma cells in the peripheral circulation at presentation may identify a subgroup of patients with micro‐metastatic disease who may benefit from adjuvant chemotherapy or radiotherapy. Our aim was to determine the presence and clinical significance of colon carcinoma cells in peripheral blood at the time of surgery. Preoperative peripheral blood samples were collected from 94 patients with CRC and 64 patients undergoing bowel resection for benign conditions (adenoma, diverticular disease or Crohn's colitis). Blood was also obtained from 20 normal donors not undergoing bowel surgery. Immunomagnetic beads were used to isolate epithelial cells followed by reverse transcription‐polymerase chain reaction (RT‐PCR) analysis of expression of cytokeratin (CK) 19, CK 20, mucin (MUC) 1 and MUC 2. Nineteen of 94 (20%) CRC patients were positive for epithelial cells in preoperative blood, including 6 with early stage disease. Kaplan–Meier survival analysis showed that detection of epithelial cells in preoperative blood was associated with reduced disease‐free and overall survival (log‐rank test, p = 0.0001). Surprisingly, circulating epithelial cells were detected in 3/30 (10%) patients resected for adenoma, and in 4/34 (12%) patients resected for benign inflammatory conditions, suggesting that cells from nonmalignant colonic epithelium may also gain entry into the bloodstream in the presence of bowel pathology. All 20 normal control bloods were negative for epithelial cells. Int. J. Cancer (Pred. Oncol.) 89:8–13, 2000. © 2000 Wiley‐Liss, Inc.