In most cases, the histopathologic and cytologic distinction between Graves' disease and papillary thyroid carcinoma is relatively easy, but on occasion Graves' disease may simulate a thyroid papillary carcinoma. For example, papillary fronds with fibrovascular cores may be present in both Graves' disease and papillary carcinoma. p27kip1 (p27) is a cyclin-dependent kinase inhibitory protein that has been shown to be an independent prognostic factor in a variety of human tumors. Our previous studies of p27 expression in hyperplastic and neoplastic endocrine lesions showed that the level of p27 was quite different in these two conditions. To determine if this distinction could also be made between Graves' disease and papillary carcinoma, we analyzed expression of p27 and other cell cycle proteins in a series of cases of Graves' disease with papillary hyperplasia and a series of papillary thyroid carcinomas. Formalin-fixed paraffin-embedded tissues from 61 randomly selected patients with thyroid disease, including 29 cases of Graves' disease with papillary architectural features and 32 cases of papillary carcinoma, were analyzed for expression of p27, Ki-67, and DNA topoisomerase II alpha (topo II alpha) by immunostaining. The distribution of immunoreactivity was analyzed by quantifying the percentage of positive nuclei that was expressed as the labeling index (LI) plus or minus the standard error of the mean. The papillary hyperplasia of Graves' disease had a p27 LI of 68.2 +/- 3.1 (range, 24 to 88), whereas papillary carcinomas had a LI of 25.6 +/- 2.5 (range, 12 to 70) (P < .0001). No significant differences in Ki-67 or topo II alpha expression were identified between papillary hyperplasia in Graves' disease and papillary carcinoma. These results indicate that p27 protein expression is significantly higher in papillary hyperplasia of Graves' disease compared to papillary carcinoma, which may be diagnostically useful in difficult cases.