<PAGE>

================================================================================

                                 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 SEPTEMBER 30, 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 November 1, 2000 the Company had outstanding 13,018,701 shares of common
stock, $.01 par value.

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

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                                Urologix, Inc.
                           Condensed Balance Sheets
                (In thousands except share and per share data)

<TABLE>
<CAPTION>
                                                            September 30, 2000           June 30, 2000
------------------------------------------------------------------------------------------------------
Assets                                                        (unaudited)                 (*)
<S>                                                     <C>                      <C>
Current assets:
   Cash and cash equivalents                                          $    231                $    459
   Available-for-sale securities                                        21,881                  23,139
   Accounts receivable, net                                                887                   1,027
   Inventories, net                                                      1,332                   1,454
   Prepaids and other current assets                                       836                     238
------------------------------------------------------------------------------------------------------
       Total current assets                                             25,167                  26,317
------------------------------------------------------------------------------------------------------
Property and equipment:
   Machinery, equipment and furniture                                    5,250                   5,259
   Less - accumulated depreciation                                      (3,719)                 (3,580)
------------------------------------------------------------------------------------------------------
       Property and equipment, net                                       1,531                   1,679
Other assets, net                                                        3,855                   3,960
------------------------------------------------------------------------------------------------------
                                                                      $ 30,553                $ 31,956
======================================================================================================

Liabilities and Shareholders' Equity
Current liabilities:
   Accounts payable                                                   $  1,473                $  1,084
   Accrued liabilities                                                   1,604                   2,102
------------------------------------------------------------------------------------------------------
       Total liabilities                                                 3,077                   3,186
------------------------------------------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
   Common stock, $.01 par value, 25,000,000 shares                         117                     116
     authorized; 11,552,073 and 11,428,937 shares issued
     and outstanding
   Additional paid-in capital                                           91,703                  91,583
   Accumulated deficit                                                 (64,354)                (62,894)
   Accumulated other comprehensive loss                                     10                     (35)
------------------------------------------------------------------------------------------------------
       Total shareholders' equity                                       27,476                  28,770
------------------------------------------------------------------------------------------------------
                                                                      $ 30,553                $ 31,956
======================================================================================================
</TABLE>

* The Balance Sheet at June 30, 2000 has been derived from the audited financial
  statements at that date but does not include all of the information and
  footnotes required by generally accepted accounting principles for complete
  financial statements.

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

                                Urologix, Inc.
                      Condensed Statements of Operations
                   (In thousands, except for per share data)
                                  (Unaudited)


                                      Three Months Ended September 30,
                                      --------------------------------
                                              2000             1999
     -----------------------------------------------------------------
     Sales                                  $   1,935         $  1,910
     Cost of goods sold                           838            1,153
     -----------------------------------------------------------------
     Gross profit                               1,097              757
     -----------------------------------------------------------------

     Costs and expenses:
     Sales and marketing                        1,661            1,522
     Research and development                     639            1,059
     General and administrative                   633              581
     -----------------------------------------------------------------
     Total costs and expenses                   2,933            3,162
     -----------------------------------------------------------------

     Operating loss                            (1,836)          (2,405)
     Interest income, net                         376              374
     -----------------------------------------------------------------
     Net loss                               $  (1,460)        $ (2,031)
     =================================================================

     =================================================================
     Basic and diluted net loss per         $   (0.13)        $  (0.18)
     common share
     =================================================================

     Basic and diluted weighted
     average number of common shares
     outstanding                               11,637           11,478

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

                                 Urologix, Inc.
                            Statements of Cash Flows
                                 (In Thousands)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                             Three Months Ended
                                                                               September 30,
                                                   --------------------------------------------------
                                                                      2000                       1999
-----------------------------------------------------------------------------------------------------
<S>                                                                <C>                        <C>
Operating Activities:
 Net loss                                                          ($1,460)                   ($2,031)
 Adjustments to reconcile net loss to net cash used
  for operating activities -
 Depreciation and amortization                                         244                        437
 Change in operating items:
  Accounts receivable                                                  140                        233
  Inventories                                                          122                        457
  Prepaids and other current assets                                   (598)                      (351)
  Accounts payable and accrued liabilities                            (109)                      (508)
-----------------------------------------------------------------------------------------------------
 Net cash used for operating activities                             (1,661)                    (1,763)
-----------------------------------------------------------------------------------------------------

Investing Activities:
 Proceeds from sale of property and equipment, net                       9                       (201)
 Proceeds from sale of securities                                    1,303                      1,928
-----------------------------------------------------------------------------------------------------
 Net cash provided by investing activities                           1,312                      1,727
-----------------------------------------------------------------------------------------------------

Financing Activities:
 Proceeds from exercise of stock options                               121                         60
-----------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                             121                         60
-----------------------------------------------------------------------------------------------------

Net increase (decrease) in Cash and Cash                              (228)                        24
 Equivalents
Cash and Cash Equivalents:
 Beginning of period                                                   459                        658
-----------------------------------------------------------------------------------------------------
 End of Period                                                  $      231                    $   682
-----------------------------------------------------------------------------------------------------

Supplemental cash flow disclosure:

Cash paid for interest                                          $        -                    $   436
</TABLE>

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

<PAGE>

                                 Urologix, Inc.
                    Notes to Condensed Financial Statements
                               September 30, 2000
                                  (Unaudited)

1. Basis of presentation

     The accompanying unaudited condensed financial statements of Urologix, Inc.
(the "Company" or "Urologix") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X. The balance sheet
as of September 30, 2000, the statements of operations for the three months
ended September 30, 2000 and 1999, and the statements of cash flows for the
three months ended September 30, 2000 and 1999, are unaudited but include all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the financial position at such dates and the operating results
and cash flows for those periods. Certain information normally included in
financial statements and related footnotes prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. The
accompanying financial statements should be read in conjunction with the
financial statements and notes included in Urologix' annual report on Form 10-K
for the year ended June 30, 2000, filed with the Securities and Exchange
Commission.

     Results for any interim period shown in this report are not necessarily
indicative of results to be expected for any other interim period or for the
entire year.

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 the periods presented. 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 is 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:

                                September 30, 2000          June 30, 2000
-------------------------------------------------------------------------
Raw materials                               $  430                 $  444
Work in process                                187                    210
Finished goods                                 715                    800
-------------------------------------------------------------------------
                                            $1,332                 $1,454
=========================================================================
<PAGE>

                                 Urologix, Inc.
                    Notes to Condensed Financial Statements
                               September 30, 2000
                                  (Unaudited)

5. 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.

<TABLE>
<CAPTION>
                                                                  Three Months Ending September 30,
                                                                           2000         1999
----------------------------------------------------------------------------------------------------
<S>                                                               <C>                 <C>
Net loss                                                          $       (1,460)     $    (2,031)
Change in net unrealized gains (losses) on available-for-
sale securities                                                               45              (37)
----------------------------------------------------------------------------------------------------
Comprehensive loss                                                $       (1,415)          (2,068)
====================================================================================================
</TABLE>

6. Subsequent Event

     On October 1, 2000, Urologix entered into and closed an Asset Purchase
Agreement with EDAP TMS S.A., a French corporation, Technomed Medical Systems
S.A., a French corporation and EDAP Technomed Inc., a Delaware corporation
(collectively "EDAP"). Under the terms of the Asset Purchase Agreement, Urologix
acquired EDAP's Transurethral Microwave Thermotherapy (TDMT) product line,
related patents and technologies (the "Acquired Assets"). Under the Asset
Purchase Agreement and related documents, Urologix paid total consideration of
$7,988,000 in cash, issued 1,365,000 shares of Urologix common stock and a
five-year warrant to purchase 327,466 shares of Urologix common stock at a price
of $7.725 per share. Urologix also agreed to assume approximately $1.5 million
in lease obligations related to equipment located at customer sites and issued a
promissory note to pay EDAP $575,000 on December 30, 2003.

<PAGE>

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

     The following is a discussion and analysis of the Urologix' financial
condition and results of operations for the three months ended September 30,
2000 and 1999. This section should be read in conjunction with the condensed
financial statements and related notes in Item 1 of this report and Urologix'
Annual Report on Form 10-K for the year ended June 30, 2000, 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 microwave
thermotherapy procedures are able to obtain third-party reimbursement, changes
in the reimbursement environment, market acceptance and the rate of adoption of
microwave thermotherapy for the treatment of BPH by the medical community, the
ability to integrate the recently acquired Prostatron product line into the
Company's operations, the impact of competitive treatments, products and
pricing, 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, 2000.

OVERVIEW

     Urologix develops, manufactures, and markets minimally invasive products
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' primary product is a non-surgical, catheter-based treatment that
uses proprietary cooled Transurethral Microwave Thermotherapy ("TUMT") to 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, TUMT can be performed without anesthesia or
intravenous sedation and, as a result, is uniquely positioned to be performed in
a physician's office or an outpatient clinic. The Company believes TUMT 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 believes that third-party reimbursement will be essential to
acceptance of the TUMT procedure, and that clinical efficacy, overall cost
effectiveness and physician advocacy will be keys to obtaining such
reimbursement. The Company estimates that 60% to 80% of patients who receive
treatment in the United States will be eligible for Medicare coverage. The
remaining patients will either be covered by private insurers, including
traditional indemnity health insurers and managed care organizations, or be
private-paying patients. As a result, Medicare reimbursement is particularly
critical for widespread market acceptance of TUMT in the United
States.

     The rate of Medicare reimbursement for TUMT is dependent on the site of
service. Through July 31, 2000, Medicare had reimbursed hospitals on a
reasonable cost basis for each TUMT procedure performed. Under the reasonable
cost basis of reimbursement, all reasonable costs the hospital incurred in
conducting the procedures were reimbursed by Medicare.
<PAGE>

     Effective August 1, 2000, the United States Health Care Finance
Administration ("HCFA"), which administers Medicare, replaced the reasonable
cost basis of reimbursement for outpatient hospital-based procedures, with a new
fixed rate or "prospective payment system". Under this new method of
reimbursement, a hospital receives a fixed reimbursement for each TUMT
procedure performed in its facility.

     On November 1, 2000, HCFA published Medicare payment rates for TUMT
procedures performed in a physician's office. The change is a significant
milestone for the Company, as it marks the first time patients will be covered
directly by Medicare for in-office TUMT procedures. Reimbursement for office-
based TUMT procedures is scheduled to be available beginning January 1, 2001.

     With the recent changes in reimbursement rates and site of care for which
Medicare will reimburse TUMT procedures, Urologix is in a period of transition.
The company will continue to support the hospital-based business while making
the preparations necessary to service and accelerate the volume of business in
urologists' offices. The Company's strategy will continue to focus on generating
physician access to and awareness of TUMT while creating patient demand by
providing education on the benefits of TUMT.

The Company will continue to market its products through a direct sales force in
the United States and utilize a network of distributors internationally.

RESULTS OF OPERATIONS

     Sales for the three-month period ended September 30, 2000 were $1.9
million, consistent with sales during the same period in the prior fiscal year.
U.S. sales of Targis System procedure kits increased 47% from the first quarter
of the prior fiscal year, however, this increase was offset by decreased sales
of Targis System control units. The increase in procedure kits sales is a result
of the growth and acceptance of TUMT and success of Urologix' "per procedure"
business model. The decrease in control unit sales was a result of uncertainties
in the reimbursement environment during the first quarter.

     Cost of goods sold decreased to $838,000 during the three months ended
September 30, 2000 compared to $1.2 million for the same period in fiscal 2000.
Gross profit as a percentage of sales increased to 57% from 40% in the same
period in the prior fiscal year due primarily to manufacturing process
improvements and decreased raw material costs.

     Research and development expenses include expenditures for product
development, regulatory compliance and clinical studies. Research and
development expenses decreased to $639,000 for the first quarter of fiscal 2001
from $1.1 million in the same period of fiscal 2000. The reduction in research
and development expenses resulted primarily from reductions in staffing and
reduced clinical study expenses due to more focused product development
investments.

     Sales and marketing expenses increased to $1.7 million for the three-month
period ended September 30, 2000 from $1.5 million during the same period in the
prior fiscal year driven by increased investment in advertising and promotion
and the expansion of the Company's direct sales force. The Company expects sales
and marketing expenses to continue to increase as the Company intensifies its
efforts to generate awareness and acceptance of cooled microwave treatment.

     General and administrative expenses and net interest income for the three
month period ended September 30, 2000 were $633,000 and $376,000 respectively,
which was consistent with general and administrative expenses and net interest
income from the same period in the prior fiscal year.
<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 September 30, 2000, the Company had total cash,
cash equivalents and available-for-sale securities of $22.1 million and working
capital of $22.1 million.

     During the three months ended September 30, 2000, the Company used $1.7
million in operating activities, primarily as a result of the Company's net
loss. The Company generated $1.3 million in investing activities, primarily
reflecting the sale of investment securities. 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 of 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 marketing and
research and development activities. In addition, the Company will continue to
rent 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.

     As discussed in Item 5 of this report, on October 1, 2000, the Company paid
$7,988,000 in cash to EDAP TMS S.A. ("EDAP") in connection with the acquisition
of EDAP's TUMT product line, related patents and technologies. This acquisition
was funded through existing cash balances and the issuance of common stock and
warrants to purchase common stock.

     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. However, 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.
<PAGE>

PART II - OTHER INFORMATION

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

     The fair value of the Company's investment portfolio at September 30, 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.

ITEM 5.  OTHER INFORMATION

     On October 1, 2000, Urologix entered into and closed an Asset Purchase
Agreement with EDAP TMS S.A., a French corporation, Technomed Medical Systems
S.A., a French corporation and EDAP Technomed Inc., a Delaware corporation
(collectively "EDAP"). Under the terms of the Asset Purchase Agreement, Urologix
acquired EDAP's Transurethral Microwave Thermotherapy (TUMT) product line,
related patents and technologies (the "Acquired Assets"). Under the Asset
Purchase Agreement and related documents, Urologix paid total consideration of
$7,988,000 in cash, issued 1,365,000 shares of Urologix common stock and a five-
year warrant to purchase 327,466 shares of Urologix common stock at a price of
$7.725 per share. Urologix also agreed to assume approximately $1.5 million in
lease obligations related to equipment located at customer sites and issued a
promissory note to pay EDAP $575,000 on December 30, 2003.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

    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 November 10, 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 and Chief Financial Officer
(Principal Financial Officer)