Whether an orthotopic bladder substitute should be constructed in patients with locally advanced or lymph node positive bladder cancer remains a subject of debate. These patients are at risk that local recurrence may impair reservoir function in orthotopic neobladders. We retrospectively assessed reservoir function in 68 consecutive patients with locally advanced bladder cancer. Tumor stage was multifocal carcinoma in situ, multifocal pT1 disease, pT2, pT3a, pT3b, and pT4a in 3, 4, 19, 11, 25, and 6 patients respectively. Lymph nodes were positive for carcinoma in 17 patients. Out of the 68 patients, 65 could be followed for at least three months. Within a median follow-up of 26 months (range three to 87 months), recurrence developed in 16 of the 65 patients (25%). 7 patients (11%) had distant failure. 9 patients (14%) showed local and distant recurrence. In the six out of the nine patients with local recurrence located lateral, dorsal, or cranial of the neobladder, adequate neobladder function was retained until the last follow-up visit or until death. Only those three patients with local recurrence involving the pelvic floor or urethra needed a suprapubic catheter due to urinary retention caused by tumor obstruction. Excluding pelvic floor and anterior urethral disease, we recommend orthotopic bladder substitution even in locally advanced but resectable disease as far as the patient is in a good performance status.