BACKGROUND: Two separate nationwide, retrospective epidemiological studies of inflammatory bowel disease (IBD) in Iceland over a combined 40-year period, 1950-1989, have shown a continually rising incidence. The main objective of this study was to investigate the incidence of IBD prospectively for the 5-year period 1990-1994 to determine whether there still was an ongoing increase. METHODS: The retrieval of new cases of ulcerative colitis (UC) and Crohn's disease (CD) was based on a monthly review of all small and large intestinal tissue specimens with any type of inflammation submitted to all three departments of pathology in Iceland. All small intestinal X-ray records suggestive of CD were also reviewed. All possible new cases of IBD were then scrutinized by examination of the clinical records, using accepted criteria for confirmation or exclusion of IBD. RESULTS: A total of 215 cases of UC and 72 cases of CD were diagnosed, yielding a mean annual incidence for UC 16.5/100000 (95% confidence interval (CI) 14.4-18.9), and for CD 5.5/100000 (95% CI 4.3-7.0). The highest combined age related incidence for UC was 28.7/100000 in the group aged 30-39 years, and for CD 8.5/100000 in the groups aged 10-19 and 20-29 years. The most common extent in UC was proctosigmoid and the most frequent localization in CD was colonic only. CONCLUSIONS: This prospective study demonstrates a continuing and statistically significant increase in the incidence of both UC and CD in Iceland. The general changes identified for a few previously suggested environmental factors do not allow any firm conclusions as to their role in the observed increase in incidence. It is possible that there are some other causative factor(s).