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Encapsulating peritoneal sclerosis is a complication of peritoneal dialysis characterized by persistent, intermittent, or recurrent adhesive bowel obstruction. Here we examined the incidence, predictors, and outcomes of encapsulating peritoneal sclerosis (peritoneal fibrosis) by multivariate logistic regression in incident peritoneal dialysis patients in Australia and New Zealand. Matched case-control analysis compared the survival of patients with controls equivalent for age, gender, diabetes, and time on peritoneal dialysis. Of 7618 patients measured over a 13-year period, encapsulating peritoneal sclerosis was diagnosed in 33, giving an incidence rate of 1.8/1000 patient-years. The respective cumulative incidences of peritoneal sclerosis at 3, 5, and 8 years were 0.3, 0.8, and 3.9%. This condition was independently predicted by younger age and the duration of peritoneal dialysis, but not the rate of peritonitis. Twenty-six patients were diagnosed while still on peritoneal dialysis. Median survival following diagnosis was 4 years and not statistically different from that of 132 matched controls. Of the 18 patients who died, only 7 were attributed directly to peritoneal sclerosis. Our study shows that encapsulating peritoneal sclerosis is a rare condition, predicted by younger age and the duration of peritoneal dialysis. The risk of death is relatively low and not appreciably different from that of competing risks for mortality in matched dialysis control patients.