Following Canadian research linking the vitamin with a small rise in cancer, the study in the Lancet journal looked at data from 50,000 people.
It found no significant differences in those taking folic acid.
Taken in early pregnancy, it reduces the chances of certain birth defects and there have been calls to add it to food in the UK.
Many countries, including the US and Canada, South Africa and Australia, already add folate - also called folic acid or Vitamin B9 - to all flour.
It is proven to reduce the number of babies born with "neural tube defects" such as spina bifida.
One of the original reasons behind this more cautious approach in western Europe was the risk that folic acid supplementation could disguise anaemia symptoms in a small number of older people.
However, another more pressing concern was prompted by the 2007 study that found the incidence of colorectal cancer, which had been falling in the US and Canada, rose temporarily just after the vitamin was automatically added to flour.
One theory suggested that folate had boosted the growth of tiny, as-yet undetected cancers or pre-cancers, allowing them to be diagnosed earlier and giving the impression that cancer rates had increased.
The Lancet study compared cancer rates over a five-year period in 50,000 people from several countries, some taking a folic acid supplement and some a placebo.
The doses of folate tended to be much higher than those proposed for mandatory fortification of flour, but a slight increase in cancer incidence recorded in this group did not reach statistical significance, meaning it could be the product of chance alone.
One of the report authors, Dr Robert Clarke, from the Clinical Trial Service Unit at the University of Oxford, said that the findings were "reassuring".
"If there was a substantial effect, we would expect to have seen it by now," he added.
He said that while the doses proposed for mandatory fortification of flour were much lower than those in the study, a small proportion of people were known to combine this with extra supplements.
He said: "If there is any caution now, this is the group of people involved."
New restrictions on the availability of high-dose supplements are one possible solution.
The UK's chief medical officers have already recommended that folate be added to flour, and the decision now rests with government ministers.
A Department of Health spokesman said: "This is a complicated issue, with a balance of risks and benefits which ministers need to consider very carefully. We already advise women thinking of starting a family and pregnant women to take folic acid supplements."
The British Dietetic Association says that fortification would be a "simple way" to increase folic acid intake across the population.
Spokesman Dr Sarah Schenker said that while there was still some caution over anaemia in the elderly, overall the benefits would outweigh the risks.
She said: "It can certainly be recommended to pregnant women and those who may become pregnant.
"Fortification may well be a good idea because our health messages about healthy eating aren't always getting through."

The funding is based on conditions including detailed development and financial plans and leasing a super-hanger at St Athan.
The firm will build its new DBX model from 2020.
The new plant will employ 750 highly-skilled workers.
The information commissioner instructed the Welsh Government to release the details of the financial support given to the company.
Ministers had initially refused to make the figure public.
This was challenged through the Freedom of Information Act by businessman Tom Gallard.
The Â£5.8m is "repayable business finance" according to the details released by the Welsh Government.
Wales beat off more than 20 other countries to secure the deal, which was announced early last year.
Mr Gallard, who runs a tech company, said: "I'm happy the Welsh Government has now released this information. It is an important principle that we must know how public funds are being spent."
Worries that taking extra folic acid might increase the risk of cancer have been played down by a major study.
[NEXT_CONCEPT]
Aston Martin is receiving Â£5.8m in financial support from the Welsh Government as part of the deal to bring the luxury carmaker to the Vale of Glamorgan, it has been revealed.