Bladder cancer is among the most prevalent malignancies, and is characterised by frequent tumour recurrences and localised inflammation, which may promote tissue invasion and metastasis. Microarray analysis was used to compare gene expression in normal bladder urothelium with that in tumours at different stages of progression. The innate immune response gene, interferon-stimulated gene 15 kDa (ISG15, GIP2), was highly expressed at all stages of bladder cancer as compared to normal urothelium. Western blotting revealed a tumour-associated expression of ISG15 protein. ISG15 exhibited a stage-associated expression, with significantly (P<0.05) higher levels of ISG15 protein in muscle-invasive T2-T4 tumours, compared with normal urothelium. Although ISG15 is involved in the primary immune response, ISG15 expression did not correlate with bladder inflammation. However, immunohistochemical staining revealed expression of ISG15 protein in both cancer cells and stromal immune cells. Interestingly, a significant fraction of ISG15 protein was localised to the nuclei of tumour cells, whereas no nuclear ISG15 staining was observed in ISG15-positive stromal cells. Taken together, our findings identify ISG15 as a novel component of bladder cancer-associated gene expression.