Objective Papillary urothelial neoplasm of low malignant potential (PUNLMP) and stage TaG1 non-muscle invasive bladder cancer (NMIBC) represent separate categories in current WHO 1999 grade definitions. Similarly, PUNLMP and Ta low-grade are separate entities in the WHO 2004/2016 grading system. However, this classification is currently questioned by reports showing a similar risk of recurrence and progression for both categories. Patients and methods In this population-based study, risk estimates were evaluated in patients diagnosed with PUNLMP (n = 135) or stage TaG1 (n = 2176) NMIBC 2004-2008 with 5-year follow-up registration in the nation-wide Bladder Cancer Data Base Sweden (BladderBaSe). The risk of recurrence was assessed using multivariable Cox regression with adjustment for multiple confounders (age, gender, marital status, comorbidity, educational level, and health care region). Results At five years, 28/135 (21%) patients with PUNLMP and 922/2176 (42%) with TaG1 had local recurrence. The corresponding progression rates were 0.7% (1/135) and 4.0% (86/2176), respectively. A higher relative risk of recurrence was detected in patients with TaG1 tumours compared to PUNLMP (Hazard Ratio 1.6, 95% CI 1.2-2.0) at 5-year follow-up, while progression events were too few to compare. Conclusions The difference in risk of recurrence between primary stage TaG1 and PUNLMP stands in contrast to the recently adapted notion that treatment and follow-up strategies can be merged into one low-risk group of NMIBC.