Abstract Purpose: Most bladder cancers are early-stage tumors known as papillary non–muscle-invasive bladder cancer (NMIBC). After resection, up to 70% of NMIBCs recur locally, and up to 20% of these recurrences progress to muscle invasion. There is an unmet need for additional biomarkers for stratifying tumors based on their risk of recurrence and progression. We previously identified STAG2 as among the most commonly mutated genes in NMIBC and provided initial evidence in a pilot cohort that STAG2-mutant tumors recurred less frequently than STAG2 wild-type tumors. Here, we report a STAG2 biomarker validation study using two independent cohorts of clinically annotated papillary NMIBC tumors from the United States and Europe. Experimental Design: The value of STAG2 immunostaining for prediction of recurrence was initially evaluated in a cohort of 82 patients with papillary NMIBC (“Georgetown cohort”). Next, the value of STAG2 immunostaining for prediction of progression to muscle invasion was evaluated in a progressor-enriched cohort of 253 patients with papillary NMIBC (“Aarhus cohort”). Results: In the Georgetown cohort, 52% of NMIBC tumors with intact STAG2 expression recurred, whereas 25% of STAG2-deficient tumors recurred (P = 0.02). Multivariable analysis identified intact STAG2 expression as an independent predictor of recurrence (HR = 2.4; P = 0.05). In the progressor-enriched Aarhus cohort, 38% of tumors with intact STAG2 expression progressed within 5 years, versus 16% of STAG2-deficient tumors (P < 0.01). Multivariable analysis identified intact STAG2 expression as an independent predictor of progression (HR = 1.86; P = 0.05). Conclusions: STAG2 IHC is a simple, binary, new assay for risk stratification in papillary NMIBC. Clin Cancer Res; 24(17); 4145–53. ©2018 AACR.