Purpose: We investigated reflectance confocal microscopy (RCM) as a possible noninvasive approach for the diagnosis of cancer and real-time assessment of surgical margins. Experimental Design: In a phase I study on 20 patients, we established the RCM imaging morphologic features that distinguish oral squamous cell carcinoma (OSCC) from normal tissue with a newly developed intraoral RCM probe. Our subsequent phase II prospective double-blinded study in 60 patients tested the diagnostic accuracy of RCM against histopathology. Five RCM videos from the tumor and five from normal surrounding mucosa were collected on each patient, followed by a 3-mm punch biopsy of the imaged area. An experienced RCM reader, who was blinded to biopsy location and histologic diagnosis, examined the videos from both regions and classified each as "tumor" or "not tumor" based on RCM features established in phase I. Hematoxylin and eosin slides from the biopsies were read by a pathologist who was blinded to RCM results. Using histology as the gold standard, we calculated the sensitivity and specificity of RCM. Results: We report a high agreement between the blinded readers (95% for normal tissue and 81.7% for tumors), high specificity (98.3%) and negative predictive values (96.6%) for normal tissue identification, and high sensitivity (90%) and positive predictive values (88.2%) for tumor detection. Conclusions: RCM imaging is a promising technology for noninvasive in vivo diagnosis of OSCC and for real-time intraoperative evaluation of mucosal surgical margins. Its inherent constraint, however, stems from the diminished capability to evaluate structures located at more substantial depths within the tissue.