The significant association between pancreaticobiliary malunion (PBM), especially undilated-type PBM, and a high risk of gallbladder cancer is known. Reflux and stasis of pancreatic juice induce various epithelial changes in the gallbladder. Recently, epithelial hyperplasia of the gallbladder was shown to be significantly and frequently associated with undilated-type PBM, and it is suggested that the majority of epithelial hyperplasia may exist at birth or be acquired in early childhood, and thereafter present throughout the lives of PBM patients. Cell kinetic studies demonstrated a significant stepwise increase in cellular proliferative activity from normal gallbladder mucosa, through epithelial hyperplasia to cancer. Epithelial hyperplasia with increased proliferative activity may predispose the mucosa to mutational events, thereby increasing cancer risk in PBM patients. K-ras mutations were frequently detected in gallbladder cancer in PBM patients and in epithelial hyperplasia as well. Epithelial hyperplasia is demonstrated to be an important premalignant lesion of gallbladder cancer. A multistep process of carcinogenesis as a consequence of multiple genetic alterations of oncogenes and tumor suppressor genes has been demonstrated in various organs; however, there is limited information on the molecular mechanism in gallbladder carcinogenesis with PBM. Recent findings support the idea that epithelial hyperplasia plays an important role in gallbladder carcinogenesis with PBM and also support the concept that neoplastic development in gallbladder with PBM also evolves through a multistep process associated with hyperproliferation and genetic alterations.