Interobserver variation in the histological grading of breast carcinoma was investigated using the hypothesis that optimal fixation, more precise grading guidelines, some experience, the use of training and test sets, and a comparison of results with an expert group might allow higher levels of agreement. For the training sets sections from 50 consecutive cases of breast carcinoma received at the Sir Charles Gairdner Hospital (SCGH) and fixed in both B5 and buffered formal saline (BFS) were graded by consensus of three pathologists at the SCGH and independently by consensus of two pathologists at the Nottingham City Hospital (NCH) using a modified Scarff-Bloom-Richardson histological grading system with guidelines as suggested by NCH pathologists. The section quality and degree of preservation of nuclear morphology were judged by NCH pathologists to be superior for B5-fixed material. Complete agreement in grade between SCGH and NCH results was achieved for 83.3% of B5-fixed cases and 73.5% of BFS-fixed cases (P = .05) with relative disagreement rates (RDRs) of 0.15 and 0.29 and kappa statistic values of 0.73 and 0.58, respectively. Approximately 80% complete agreement was achieved for tubule formation, nuclear score, and mitotic count, with RDRs ranging from 0.19 to 0.27 and kappa values from 0.46 to 0.69. There was a consistent bias in the SCGH results toward a higher tubule score in both B5- and BFS-fixed material because of a difference in interpretation of cribriform or complex gland patterns and a consistent bias in SCGH results toward a lower nuclear size/pleomorphism score for B5 and BFS material. For the test set sections from 50 further consecutive cases of breast cancer fixed in B5 were examined using similar criteria but taking into account the sources of error shown by the training set. Approximately 80% complete agreement was again achieved for grade components and grade (RDRs, 0.18 and 0.72). Systematic bias was reduced in the test set, but no other improvement was observed. Of the tumors designated as grade I by NCH, 87.5% were called grade I tumors by SCGH in the B5 training set, 84.6% in the B5 test set, and 66.6% in the BFS training set. The levels of agreement shown in both the training and test sets were satisfactory and represented a significant improvement over our previous study, suggesting that experience and precise grading guidelines are of value. The similar levels of agreement in training and test sets suggest that reasonable results can be achieved without direct training by expert groups.(ABSTRACT TRUNCATED AT 400 WORDS)