Conventional pap smear (CPS) examination has been the mainstay for early detection of cervical cancer. However, its widespread use has not been possible due to the inherent limitations, like presence of obscuring blood and inflammation, reducing its sensitivity considerably. Automated methods in use in developed countries may not be affordable in the developing countries due to paucity of resources. On the other hand, manual liquid based cytology (MLBC) is a technique that is cost effective and improves detection of precursor lesions and specimen adequacy. Therefore the aim of the study was to compare the utility of MLBC with that of CPS in cervical cancer screening. A prospective study of 100 cases through MLBC and CPS was conducted from October 2009 to July 2010, in a Medical College in India, by two independent pathologists and correlated with histopathology (22 cases). Morphological features as seen through MLBC and CPS were compared. Subsequently, all the cases were grouped based on cytological diagnosis according to two methods into 10 groups and a subjective comparison was made. In order to compare the validity of MLBC with CPS in case of major diagnoses, sensitivity and specificity of the two methods were estimated considering histological examination as the gold standard. Increased detection rate with MLBC was 150%. The concordance rate by LBC/histopathology v/s CPS/histopathology was also improved (86% vs 77%) The percentage agreement by the two methods was 68%. MLBC was more sensitive in diagnosis of LSIL and more specific in the diagnosis of inflammation. Thus, MLBC was found to be better than CPS in diagnosis of precursor lesions. It provided better morphology with increased detection of abnormalities and preservation of specimen for cell block and ancillary studies like immunocytochemistry and HPV detection. Therefore, it can be used as alternative strategy for cervical cancer prevention in limited resource settings.