<PAGE>

================================================================================
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-Q

                                 ---------------


[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                       Or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

         For the transaction period from ____________ to _______________

                         Commission File Number 0-28414

                                 ---------------

                                 UROLOGIX, INC.
             (Exact name of registrant as specified in its charter)


          Minnesota                                 41-1697237
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                  Identification No.)

                 14405 21st Avenue North, Minneapolis, MN 55447
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (612) 475-1400

                                 ---------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]


As of April 18, 2000 the Company had outstanding 11,559,155 shares of common
stock, $.01 par value.

--------------------------------------------------------------------------------
================================================================================
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UROLOGIX, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                     March 31, 2000         June 30, 1999
----------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                   <C>
                                                                        (Unaudited)
ASSETS
Current assets:
    Cash and cash equivalents                                         $     373,887         $     657,596
    Available-for-sale securities                                        24,222,956            27,378,692
    Accounts receivable, net                                              1,408,578             1,260,810
    Inventories, net                                                        562,930             2,436,418
    Prepaids and other current assets                                       247,499               588,355
----------------------------------------------------------------------------------------------------------
         Total current assets                                            26,815,850            32,321,871
----------------------------------------------------------------------------------------------------------
Property and equipment:
    Machinery, equipment and furniture                                    5,332,024             4,772,666
    Less - accumulated depreciation                                      (3,382,431)           (2,521,479)
----------------------------------------------------------------------------------------------------------
         Property and equipment, net                                      1,949,593             2,251,187
Other assets, net                                                         4,072,809             4,414,974
----------------------------------------------------------------------------------------------------------
                                                                      $  32,838,252         $  38,988,032
==========================================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                  $     742,350         $     836,999
    Accrued liabilities                                                   1,842,452             2,684,390
----------------------------------------------------------------------------------------------------------
         Total liabilities                                                2,584,802             3,521,389
----------------------------------------------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
    Common stock, $.01 par value, 25,000,000 shares                         115,521               114,289
      authorized; 11,552,073 and 11,428,937 shares issued and
      outstanding
    Additional paid-in capital                                           91,431,482            91,149,858
    Accumulated deficit                                                 (61,263,101)          (55,796,123)
    Accumulated other comprehensive loss                                    (30,452)               (1,381)
----------------------------------------------------------------------------------------------------------
         Total shareholders' equity                                      30,253,450            35,466,643
----------------------------------------------------------------------------------------------------------
                                                                      $  32,838,252          $ 38,988,032
==========================================================================================================
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.
<PAGE>

UROLOGIX, INC.
STATEMENT OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                                  Three Months Ended March 31,             Nine Months Ended March 31,
                                       ----------------------------------------------------------------------------------
                                                    2000                1999                2000                 1999
-------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                 <C>                 <C>                  <C>
Sales                                           $ 2,326,616         $ 1,341,892         $ 6,158,270          $ 4,200,444
Cost of goods sold                                1,213,179             956,368           3,478,428            4,699,070
-------------------------------------------------------------------------------------------------------------------------
Gross profit (loss)                               1,113,437             385,524           2,679,842             (498,626)
-------------------------------------------------------------------------------------------------------------------------

Costs and expenses:
Research and development                            788,763           1,264,244           2,780,698            3,790,084
Sales and marketing                               1,830,313           1,342,045           4,942,991            5,036,407
General and administrative                          484,555             558,142           1,522,651            3,515,295
-------------------------------------------------------------------------------------------------------------------------
Total costs and expenses                          3,103,631           3,164,431           9,246,340           12,341,786
-------------------------------------------------------------------------------------------------------------------------

Operating loss                                   (1,990,194)         (2,778,907)         (6,566,498)         (12,840,412)
Interest income, net                                367,139             418,309           1,099,520            1,344,560
-------------------------------------------------------------------------------------------------------------------------
Net loss                                       $ (1,623,055)       $ (2,360,598)       $ (5,466,978)       $ (11,495,852)
=========================================================================================================================

=========================================================================================================================
Basic and diluted net loss per common share         $ (0.14)            $ (0.21)            $ (0.48)             $ (1.01)
=========================================================================================================================

Basic and diluted weighted average number of
common shares outstanding                         11,525,616         11,423,575          11,494,432           11,346,467

</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.
<PAGE>

UROLOGIX, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                  March 31,
                                                            --------------------------------------------
                                                                      2000                      1999
--------------------------------------------------------------------------------------------------------
<S>                                                               <C>                     <C>
Operating Activities:
    Net loss                                                       ($5,466,978)            ($11,495,852)
    Adjustments to reconcile net loss to net cash used for
     operating activities -
      Loss on impairment of assets                                           -                  771,362
      Depreciation and amortization                                  1,203,117                1,151,997
      Change in operating items:
         Accounts receivable                                          (147,768)               2,818,110
         Inventories                                                 1,873,488                1,339,928
         Prepaids and other current assets                             340,856                   (3,415)
         Accounts payable and accrued liabilities                     (936,587)                (553,944)
--------------------------------------------------------------------------------------------------------
            Net cash used for operating activities                  (3,133,872)              (5,971,814)
--------------------------------------------------------------------------------------------------------

Investing Activities:
    Purchases of property and equipment, net                          (559,358)                (663,288)
    Proceeds from sale of securities                                 3,126,665                6,767,810
--------------------------------------------------------------------------------------------------------
           Net cash provided by investing activities                 2,567,307                6,104,522
--------------------------------------------------------------------------------------------------------

Financing Activities:
    Proceeds from exercise of stock options                            282,856                   96,027
--------------------------------------------------------------------------------------------------------
           Net cash provided by financing activities                   282,856                   96,027
--------------------------------------------------------------------------------------------------------

Net increase (decrease) in Cash and Cash Equivalents                  (283,709)                 228,735
Cash and Cash Equivalents:
    Beginning of period                                                657,596                  882,801
--------------------------------------------------------------------------------------------------------
    End of Period                                                    $ 373,887              $ 1,111,536
========================================================================================================

Supplemental cash flow disclosure:

Cash paid for interest                                                   $ 773                    $ 707
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.
<PAGE>

UROLOGIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)

1.   Basis of presentation

     The accompanying unaudited consolidated financial statements reflect all
adjustments, consisting solely of normal recurring adjustments, needed to
present the financial results for these interim periods fairly. These financial
statements include certain amounts that are based on estimates and judgments.
These estimates may be adjusted as more current information becomes available,
and any adjustment could be significant. Results for any interim period are not
necessarily indicative of results for any other interim period or for the entire
year.

     Following the rules and regulations of the Securities and Exchange
Commission, footnote disclosures that would substantially duplicate the
disclosures contained in Urologix' annual audited financial statements have been
omitted. However, these unaudited consolidated financial statements should be
read together with the consolidated financial statements and the notes included
in Urologix Annual Report on Form 10-K, for the year ended June 30, 1999.

2.   Basic and diluted net loss per share

     Basic and diluted net loss per common share was computed by dividing the
net loss by the weighted average number of shares of common stock outstanding
during each period. The impact of common stock equivalents has been excluded
from the computation of weighted average common shares outstanding, as the
effect would be antidilutive.

3.   Revenue recognition

     Revenue from product sales is recognized at the time of shipment, net of
estimated returns, which are also provided for at the time of shipment. Deferred
revenue for warranty service contracts are recognized over the contract period.
Revenue from equipment rental through the Company's per procedure fee program is
recognized at the time of equipment use.

4.   Inventories

Inventories consisted of the following as of:

                                                March 31, 2000     June 30, 1999
--------------------------------------------------------------------------------
Raw materials                                         $313,727        $  783,091
Work in process                                        187,544         1,180,443
Finished goods                                          61,659           472,884
--------------------------------------------------------------------------------
                                                      $562,930        $2,436,418
================================================================================
<PAGE>

UROLOGIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)

5.   Operational Realignment and Other Charges

As a result of a downward revision to the Company's sales forecast in the first
quarter of fiscal 1999, the Company consolidated facilities and reduced the
workforce in an effort to decrease operating expenses. As a result of this
operational realignment, the Company recorded a charge to general and
administrative expenses for $1.6 million, reflecting severance costs paid to
employees, future lease costs related to facilities no longer occupied and the
impairment of assets no longer used. Additionally, the Company established a
$1.3 million reserve for excess inventories as a result of the downward revision
to the sales forecast. The impact of the operational realignment produced
reductions to operating expense beginning in the second quarter of fiscal 1999.

The charges described above were recorded in the quarter ended September 30,
1998. The elements of the total charge as of March 31, 2000 were as follows:

<TABLE>
<CAPTION>
                                                                                    Cash Outlays
                                               Asset        Change in     -------------------------------
                     Total Charges        Write-down         Estimate        Completed           Future
                     ------------------------------------------------------------------------------------
<S>                    <C>               <C>               <C>               <C>                <C>
Inventories            $ 1,300,000       $ 1,300,000       $        -        $       -          $      -
Fixed assets               722,000           722,000                -                -                 -
Facility shut down         548,000                 -         (130,000)         332,000            86,000
Employee severance         309,000                 -                -          309,000                 -
                     ------------------------------------------------------------------------------------
                       $ 2,879,000       $ 2,022,000       $ (130,000)       $ 641,000          $ 86,000
                     ====================================================================================
</TABLE>

6.   Comprehensive Loss

Comprehensive loss includes all changes in equity during a period except those
resulting from investments by and distributions to shareholders. For the
Company, comprehensive loss represents net loss adjusted for unrealized gains
(losses) on available-for-sale securities.

                                               Nine Months Ending March 31,
                                                 2000               1999
----------------------------------------------------------------------------
Net loss                                     $(5,466,978)      $(11,495,852)
Change in net unrealized gains (losses)
on available-for-sale securities                 (29,071)           101,758
----------------------------------------------------------------------------
Comprehensive loss                           $(5,496,049)      $(11,394,094)
============================================================================
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following is a discussion and analysis of the Company's consolidated
financial condition and results of operations for the three and nine months
ended March 31, 2000 and 1999. This section should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended June 30, 1999, which
has been filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking Statements

This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains, in addition to historical information, forward-looking
statements that are based on the Company's current expectations, beliefs,
intentions or future strategies. These statements are subject to risks and
uncertainties that could cause actual results to differ materially from the
statements, including the extent to which the physicians performing the Targis
System procedures are able to obtain third-party reimbursement, changes in the
reimbursement environment, market acceptance and the rate of adoption of the
Targis treatment by the medical community, the impact of competitive treatments,
products and pricing, the approval of a shortened treatment time for the Targis
System and the effectiveness of the Company's sales and marketing organization.
The Company does not undertake responsibility to update such forward-looking
statements to reflect events that arise after the date of this report. A
detailed discussion of risks and uncertainties may be found in the Company's
Annual Report on Form 10-K for the year ended June 30, 1999.

OVERVIEW

     Urologix develops, manufactures, and markets a minimally invasive medical
device for the treatment of benign prostatic hyperplasia ("BPH"), commonly known
as "enlarged prostate." BPH dramatically affects the quality of life of millions
of men by causing adverse changes in urinary voiding patterns. Urologix' Targis
System has been approved for marketing in the United States, the 15 European
Union countries, Japan and Canada.

     The Targis procedure is a non-surgical, catheter-based treatment that uses
a proprietary microwave technology to preferentially heat diseased areas of the
prostate, while simultaneously cooling and protecting the pain-sensitive
urethral tissue. Because the urethra is protected from heat and is not punctured
or penetrated, Targis treatment can be performed without general or regional
anesthesia or intravenous sedation. Accordingly, Targis treatment is uniquely
positioned to be performed in a physician's office or an outpatient clinic. The
Company believes Targis treatment provides an efficacious, safe and cost
effective solution for BPH that provides results superior to medication without
the complications and side effects inherent in surgical procedures, and as such,
is well positioned to address the needs of physicians, patients and payors.

     The Company markets the Targis System in the United States through a direct
sales force. The Company intends to continue to expand the direct sales force
and enhance its direct sales capabilities. The Company's strategy is to focus
marketing and sales efforts on generating physician access to and awareness of
the Targis System while creating patient demand by providing education on the
benefits of Targis treatment versus other treatment options.

     Outside the United States, the Company has a distribution agreement with
Nihon Kohden Corporation ("Nihon Kohden"), a major Japanese developer,
manufacturer and marketer of medical devices, for the market development and
sales of the Targis System in Japan. The Company also has a distribution
agreement with Boston Scientific covering the majority of the European
countries. Under the agreement, Urologix has responsibility for market
development of the Targis System and works with Boston Scientific to sell Targis
Systems from Boston Scientific's inventory through Urologix' direct sales force
and other distributors in Europe. Boston Scientific compensates Urologix for
Urologix' market development services.
<PAGE>

RESULTS OF OPERATIONS

     Sales increased to $2.3 million and $6.2 million for the three and nine-
month periods ended March 31, 2000 from $1.3 million and $4.2 million during the
same periods in the prior fiscal year. The increase in revenue during the three
and nine-month periods is due primarily to increased sales of Targis System
procedure kits. To grow procedure based revenue, the Company implemented a "per
procedure" sales and marketing business model in March of 1999. Under the per
procedure fee program, customers pay a fee for the use of a Targis System
control unit and treatment catheter, reducing the need for an upfront capital
equipment purchase. The increase in procedure kits sales is a result of the
success of this program.

     Cost of goods sold increased to $1.2 million during the three months ended
March 31, 2000 compared to $956,000 for the same period in 1999. Cost of goods
sold increased as a result of higher sales volume. Gross margin as a percentage
of sales increased to 48% from 29% in the same period in the prior fiscal year
due primarily to decreased product cost and improved manufacturing efficiency.

     Cost of goods sold decreased to $3.5 million during the nine-months ended
March 31, 2000 compared to $4.7 million for the same period in 1999. Cost of
goods sold was affected by two events in the nine-months ended March 31, 1999.
First, as a result of a downward revision to forecasted sales, the Company
established a reserve of $1.3 million for excess inventory. Second, the Company
operated under a reduced production schedule, as production was transitioned to
a new catheter design, resulting in the allocation of overhead over a lower
production volume. Gross margin as a percentage of sales increased to 44% from
(12%) in the same period in the prior fiscal year due to decreased product cost
and improved manufacturing efficiency.

     Research and development expenses include expenditures for product
development, regulatory compliance and clinical studies. Clinical study costs
consist largely of payments to clinical sites and investigators, product for
clinical studies, and costs associated with monitoring clinical studies.
Research and development expenses decreased to $789,000 and $2.8 million for the
three and nine-month periods ended March 31, 2000 from $1.3 million and $3.8
million for the same periods in the prior fiscal year, due primarily to
reductions in staffing, the conclusion of several clinical studies and lower
regulatory and product development expenses.

     Sales and marketing expenses increased to $1.8 million for the three-month
period ended March 31, 2000 from $1.3 million during the same period in the
prior fiscal year. Sales and marketing costs incurred during the nine-months
ended March 31, 2000 decreased to $4.9 million from $5.0 during the same period
in the prior fiscal year. The change in sales and marketing expenses is
attributable to payments received from Boston Scientific Corporation for
international market development services, which are reflected as reductions in
sales and marketing expense. Excluding the payments received from Boston
Scientific, sales and marketing expenses for the three and nine months ending
March 31, 2000 are consistent with expenses for the three and nine-months ending
March 31, 1999. The Company expects sales and marketing expenses to increase as
the Company hires additional direct sales representatives and intensifies its
efforts to generate awareness and acceptance of the Targis treatment.

     General and administrative expenses decreased to $485,000 and $1.5 million
for the three and nine-month period ended March 31, 2000 from $558,000 and $3.5
million during the same period in the prior fiscal year. General and
administrative expenses decreased due to reductions in staffing and other
administrative expenses. General and administrative expenses for the nine-months
ended March 1999 include the impact of a $1.6 million charge incurred in
connection with the operational realignment.

     Interest income decreased to $367,000 and $1.1 million for the three and
nine-months ended March 31, 2000 from $418,000 and $1.3 million for the same
period in the prior fiscal year. Interest income decreased due primarily to
lower cash and investment balances.
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company has financed its operations since inception through sales of
equity securities and, to a lesser extent, sales of the Targis System and Targis
System procedure kits. As of March 31, 2000, the Company had total cash, cash
equivalents and available-for-sale securities of $24.6 million and working
capital of $24.2 million.

     During the nine-months ended March 31, 2000, the Company used $3.1 million
in operating activities, primarily as a result of the Company's net loss. The
Company generated $2.6 million in investing activities, primarily reflecting the
sale of $3.1 million of investment securities less purchases of $559,000 of
property and equipment. The Company is financing its fiscal 2000 operating and
investing activities primarily through funds received in a November 1997
secondary offering that raised net proceeds of $31.5 million.

     In January of 2000, the Company amended the International Distribution
Agreement with Boston Scientific Corporation. Under the amended agreement,
Boston Scientific will compensate the Company for market development services by
shipping and transferring title of a defined number Targis System control units
held in Boston Scientific's inventory to the Company. The Company intends to use
these control units as part of its per procedure rental program.

     The Company expects to continue to incur additional losses and will use its
working capital as it incurs substantial expenses related to the Targis System
marketing and research and development activities. In addition, the Company has
commenced a program to rent Targis System control units to customers on a per
procedure basis. Depending on the growth of this program, the Company may use
substantial capital to finance the units rented by customers.

     Although the Company believes that existing cash, cash equivalents and
available-for-sale securities will be sufficient to fund its operations for at
least the next 24 months, there can be no assurance that the Company will not
require additional financing in the future or that any additional financing will
be available to the Company on satisfactory terms, if at all.

INTEREST RATE RISK

     The fair value of the Company's investment portfolio at March 31, 2000
approximated carrying value. Increases and decreases in prevailing interest
rates generally translate into decreases and increases in the fair value of
these instruments. Also, fair values of interest rate sensitive instruments may
be affected by the credit worthiness of the issuer, prepayment options, relative
values of alternative instruments, the liquidity of the instrument and other
general market conditions.

     Market risk was estimated as the potential decrease in fair value resulting
from a hypothetical 10% increase in interest rates for the issues contained in
the investment portfolio and was not materially different from the year-end
carrying value.


YEAR 2000 ISSUE

     In late 1999 the Company completed year 2000 remediation and testing of its
systems and experienced no significant disruptions in critical information
technology and non-information technology systems. The Company did not incur any
material expenditures in connection with the remediation and testing of
information technology and non-information technology systems. As of this date,
the Company is not aware of any material problems resulting from Year 2000
issues, either with its products, internal systems, or the products and services
of third parties. However, there can be no assurance that the
<PAGE>

Company has fully and accurately assessed its Year 2000 readiness or of the
effectiveness of corrective actions. Nor can there be any assurance that the
company's customers, suppliers and vendors fully and accurately assessed their
Year 2000 readiness or of the effectiveness of their corrective actions.
Accordingly, the Company will continue to monitor its critical computer
applications and those of its customers, suppliers and vendors throughout the
year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.

Item 3. Qualitative and Quantitative Disclosure about Market Risk

     See Item 2, "Management's Discussion and Analysis of Financial Condition
     and Results of Operations -"Interest Rate Risk"

PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     10.1 Modification to Amendment to International Distribution Agreement
          between Urologix, Inc. and Boston Scientific Corporation. Certain
          information has been omitted from this exhibit and filed separately
          with the Commission pursuant to a request for confidential treatment
          under Rule 24b-2.

     27.1 Financial Data Schedule

(b)  Reports on Form 8-K

     During the quarter for which this Quarterly Report is filed, the Company
     filed no Reports on form 8-K.
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date May 12, 2000



Urologix, Inc.
--------------

(Registrant)



/s/ Michael M. Selzer, Jr.
--------------------------

Michael M. Selzer, Jr.
President and Chief Executive Officer
 (Duly Authorized Officer)




/s/ Christopher R. Geyen
------------------------

Christopher R. Geyen
Vice President Finance
(Principal Financial Officer)