The boffins found that individuals who ate the milk product saw their risk of suffering from the disease drop by 40 per cent compared to those who rarely touched yogurt.
Researchers reckon that bacteria in yogurt gives the protection.
To reach the conclusion, the experts looked at the diets of more than 80,000 volunteers over nine years and found that the 500 who developed bladder cancer were likely not to have eaten much yogurt.
The scientists said that having about two average-sized tubs of yogurt a day reduced the risk by 45 per cent in women and 36 per cent in men.
But not all dairy products were found to have the same benefit.
"Cultured milk products such as yogurt contain lactic acid bacteria and have been shown to suppress bladder cancer in rats," the Daily Express quoted the researchers at Sweden's Karolinska Institute, as saying.
"Our research suggests a high intake may reduce the risk," they added.
The study has been published in the American Journal of Clinical Nutrition.