Before the controversies surrounding dysplastic melanocytic nevi are resolved, dermatopathologists must be able to reliably distinguish dysplastic nevi from common acquired nevi and malignant melanoma. To establish whether grading of melanocytic dysplasia has any biologic relevance, dermatopathologists must be able to consistently recognize two or more grades of atypia. We studied the concordance among five dermatopathologists for recognition and grading of 60 nevomelanocytic lesions. Ten cases from each of the following categories of melanocytic proliferation were retrieved from the Massachusetts General Hospital files: 1) common melanocytic nevi, 2) melanocytic nevi with features of dysplastic nevi, 3) dysplastic nevi with slight cytologic atypia, 4) dysplastic nevi with moderate cytologic atypia, 5) dysplastic nevi with severe cytologic atypia, and 6) primary malignant melanoma. The slides were reviewed independently; no discussion of diagnostic criteria preceded the review. Overall concordance for diagnosing dysplastic nevi was 77%, with a kappa statistic of 0.55-0.84. Furthermore, in grading dysplastic nevi, experienced dermatopathologists had a concordance ranging from 35% to 58% (kappa value 0.38-0.47). Those with less experience in grading dysplastic nevi had a concordance of 16-65% (kappa value 0.05-0.24). The five observers in this study reliably distinguished dysplastic nevi from common acquired nevi and malignant melanoma. Further refinement of the criteria for grading of nevo-melanocytic dysplasia and experience in grading are critical for accuracy in subcategorization of dysplastic nevi. Consistent, reproducible subcategorization of dysplastic nevi is a requisite before the issue of biologic or prognostic relevance of grading (dysplastic nevi) can be addressed. This study supports the validity of existing criteria for the diagnosis of dysplastic nevi because the problems in diagnosis were at the limits of the spectrum, namely, discrimination of slightly atypical dysplastic nevi from common nevi and severely atypical dysplastic nevi from radial growth phase melanoma.