Purpose : To assess the effect of nerve-sparing (NS) radical retropubic prostatectomy (RRP) on surgical margins and biochemical recurrence. Patients and Methods: Location and incidence of positive surgical margins, recurrence, and time to recurrence were assessed in a consecutive series of 734 men who underwent RRP for localized prostate cancer from 1992 through February 2000. NS procedures were used in 33% (n = 240) of 734 patients studied. Results: Surgical margins were positive for 24% (n = 58) and 31% (n = 152) of NS and non-NS patients, respectively (P = .06). No significant difference between the groups was found in location of positive margins (P = .92). Prostate-specific antigen level greater than 10 ng/mL, extraprostatic extension, tumor volume more than 20%, capsular penetration, Gleason score greater than or equal to 7, positive margins, and seminal vesicle invasion were associated with significantly increased risk of recurrence. However, NS patients were not at increased risk of recurrence compared with non-NS patients (hazard ratio, 0.96; 95% confidence interval, 0.53 to 1.72). The cumulative risk of recurrence within 3 and 5 years of surgery in NS patients was 9.7% and 14.4%, respectively, as compared with 17.1% and 21.1% for non-NS patients. Conclusion: in patients with localized prostate cancer, neither margin status nor biochemical-free survival within 5 years of surgery were altered by the nerve preservation technique. Given our experience, we recommend preservation of neurovascular bundles in these patients whenever the procedure is technically feasible.