Oral lichen planus is categorized as a potentially malignant condition by the World Health Organization; however, some argue that only lichen planus with dysplasia have malignant potential. Many pathologists call lichen planus with dysplasia "dysplasia with lichenoid mucositis (LM)" or "LM with dysplasia." Previous research has shown that certain high-risk patterns of loss of heterozygosity (LOH) in dysplastic lesions are associated with significantly increased cancer risk. However, LM without dysplasia lacks such molecular patterns, supporting the hypothesis that LM, by itself, is not potentially malignant and that only those with dysplasia have malignant potential. To further investigate the premalignant nature of LM with dysplasia, this study compared the rate of malignant progression of dysplasia with LM with that of dysplasia without LM. Patients from a population-based prospective cohort study with >10 y of follow-up were analyzed. Study eligibility included a histological diagnosis of a primary low-grade dysplasia with or without LM. A total of 446 lesions in 446 patients met the selection criteria; 373 (84%) were classified as dysplasia without LM, while 73 (16%) were classified as dysplasia with LM. Demographic and habit information, clinical information, and outcome (progression) were compared between the 2 groups. Forty-nine of 373 cases of dysplasia (13%) progressed compared to 8% (6/73) of dysplasia with LM. However, the difference was not statistically different ( P = 0.24). The 3- and 5-y rate of progression did not differ between the groups (6.7% and 12.5% for dysplasia without LM and 2.9% and 6.6% for those with LM; P = 0.36). Progression was associated with nonsmoking, location at a high-risk site, and diagnosis of moderate dysplasia regardless of whether LM was present or not. Dysplasia with or without LM had similar cancer risk, and dysplasia should not be discounted in the presence of LM.