INTRODUCTION:  Urine cytology is a extremely valuable  non invasive test to study the exfoliated cells from kidney, ureter, bladder, prostate and urethra. Atypical cells in urine cytology is very rarely seen. Malignancy, instrumentation, lithiasis, inflammation, infection with human polyomavirus, effects of drugs, and radiotherapy are some of the causes for  presence of atypical cells in urine cytology It is a cheap and non inavasive test used in screening for bladder carcinoma .  AIM AND OBJECTIVES: we conducted this study to analyse the diagnostic value of urine cytology for detecting  atypical urothelial cells  in pre malignant and malignant tumors of bladder MATERIALS AND METHODS: A total of  4015 freshly voided urine samples were received and studied during the period of OCT 2016 to MAR 2017 in a tertiary health care center of kancheepuram district of Tamilnadu. Hematuria samples were extensively studied through microscopic examination  for the presence of  atypical cells and malignant cells RESULTS AND OBSERVATION: Out of 4015 urine samples , 182 samples are from cases of hematuria (4.5%) including both gross and microscopic hematuria.  Out of 182 only 40 samples showed atypical cells. Of which only 6 cases are proved to be malignant and other 16 cases are due to  reactive changes. CONCLUSION All hematuria Samples should be studied microscopically to rule out malignancy. Accuracy of cytology in detecting atypical cells is directly proportional to the grade of tumor. Higher the grade and  higher the accuracy .