Assessment of epithelial dysplasia in ulcerative colitis has been hindered by inconsistencies in and disagreements about nomenclature and interpretation. To resolve these issues, pathologists from ten institutions participated in three exchanges of multiple slides and, following each exchange, in discussions of the results. A classification system for the epithelial changes that occur in ulcerative colitis was developed, which should be applicable to other forms of inflammatory bowel disease as well. The classification makes use of standardized terminology, addresses specific problem areas, and offers practical solutions. The reproducibility of the system was studied by means of examinations of both inter- and intra-observer variations. The clinical implications of the findings were incorporated into suggestions for patient management. The basis of the classification is that the term "dysplasia" is reserved for epithelial changes that are unequivocally neoplastic and may therefore give rise directly to invasive carcinoma. Specimens are categorized as negative, indefinite, or positive for dysplasia. The negative category includes all inflammatory and regenerative lesions and indicates that only continued regular surveillance is required. The indefinite category is applied to epithelial changes that appear to exceed the limits of ordinary regeneration but are insufficient for an unequivocal diagnosis of dysplasia or are associated with other features that prevent such unequivocal diagnosis. Clinically, it indicates that early repeat biopsy is often required to assess the changes more accurately. The positive category is divided into two subcategories: 1) high-grade dysplasia, for which colectomy should be strongly considered after confirmation of the diagnosis, and 2) low-grade dysplasia, which also requires confirmation and early repeat biopsy or colectomy, depending on other findings.