Bladder cancer is the sixth most common cancer in humans. This heterogeneous set of lesions including urothelial carcinoma (Uca) and squamous cell carcinoma (SCC) arise from the urothelium, a stratified epithelium composed of K5-expressing basal cells, intermediate cells and umbrella cells. Superficial Uca lesions are morphologically distinct and exhibit different clinical behaviours: carcinoma in situ (CIS) is a flat aggressive lesion, whereas papillary carcinomas are generally low-grade and non-invasive. Whether these distinct characteristics reflect different cell types of origin is unknown. Here we show using lineage tracing in a murine model of carcinogenesis that intermediate cells give rise primarily to papillary lesions, whereas K5-basal cells are likely progenitors of CIS, muscle-invasive lesions and SCC depending on the genetic background. Our results provide a cellular and genetic basis for the diversity in bladder cancer lesions and provide a possible explanation for their clinical and morphological differences.