Blood in the urine is never normal, but it can be present for benign and not-so-benign reasons. "Microscopic hematuria" is when blood is only seen on a urine test (urinalysis), or "gross hematuria" where actual blood or clots are seen in the urine.
There are many urinary tract issues that can lead to both, but essentially, blood in the urine can come from the kidney, ureter, bladder or urethra. Often menstural blood, or if urine contacts labial skin/hair on the way out prior to hitting the cup, can both lead to false positives.
Common benign reasons for blood in the urine are: urinary tract infection (active or resolving), kidney or bladder stones, foreign objects in the urinary tract (stitches or mesh that have eroded into the bladder), urinary tract deformities from birth, interstitial cystitis, estrogenic changes to the bladder base (common and benign) and benign polyps. Sometimes medications can lead to blood "leak" into the urine- often these are blood thinners such as warfarin (coumadin), aspirin, plavix or pain medications such as prolonged motrin, Celebrex and the like.
More serious conditions that lead to blood in the urine can be tumors of the kidney, ureter or bladder. Of all the urinary organs, the bladder is the most common place to find tumors. Biopsy confirms the findings.
Smoking and exposure to certain chemical agents used in heavy manufacturing of dyes, paint, leatherstripping can lead to urinary tract tumors.
False positives can also happen with food dyes, pyridium, beets, and certain antibiotics.
Gross blood in the urine or persistent microscopic blood should be investigated.