Inverted nipples have been treated by various methods by many authors, but the relationship between the grade of the deformity and the appropriate surgical procedure is not clearly described. One hundred seven inverted nipples in 60 patients were treated from 1993 to 1997. They were divided into three groups by the authors' system of grading. The grade was made by preoperative evaluation of severity of inversion and was confirmed by the surgical findings. In grade I, the nipple is easily pulled out manually and maintains its projection quite well. Grade I nipples are believed to have minimal fibrosis; thus, manual traction and a single, buried purse-string suture are enough for the correction. The majority of inverted nipples belong to grade II, i.e., the nipples can be pulled out but cannot maintain projection and tend to go back again. These nipples are thought to have moderate fibrosis beneath the nipple. Blunt dissections for surgical release were carried out until the inversion did not recur after releasing the traction. The lactiferous ducts could be identified and preserved, permitting proper release of fibrotic bands in the grade II group. The purse-string suture was used. In grade III, to which the least number of inverted-nipple cases belong, the nipple can hardly be pulled out manually. Severe fibrosis made it impossible to reach optimal release of the fibrotic band with the preservation of the ducts. The fibrotic bands are widely dissected, and the lactiferous ducts are cut, especially in the central portion. Two or three deepithelialized dermal flaps may be used to make up for soft-tissue deficiency; a purse-string suture is also used. This grading system will be useful for patient classification and analysis, systematic planning, and application of the proper surgical procedures.