When an entire portion of epithelium is composed of abnormal cells and no normal epithelial cells remain, and the process is not potentially reversible, then the process has gone beyond dysplasia and is now neoplasia, which is loss of control of the cellular proliferative process. If the basement membrane is still intact, as shown here, then the process is called "carcinoma in situ" because the carcinoma is still confined to the epithelium. A neoplasm arising in epithelium is termed as a carcinoma.

Note the chronic inflammatory response in the submucosa. Dysplastic and neoplastic epithelia are abnormal and therefore not as protective as normal epithelia, so that irritants, infections, and trauma are more likely to damage the surface and initiate inflammation. It is also possible that the lymphocytes below the epithelium are part of an immune response, or "tumor immunity". Neoplastic cells may be altered or express antigens to elicit an immune response. This "immune surveillance" plays a role in stopping or slowing neoplastic processes, but can easily be overwhelmed when forces driving the neoplastic process persist.