Currently, prognostic and therapeutic determinations for canine cutaneous mast cell tumors (MCTs) are primarily based on histologic grade. However, the use of different grading systems by veterinary pathologists and institutional modifications make the prognostic value of histologic grading highly questionable. To evaluate the consistency of microscopic grading among veterinary pathologists and the prognostic significance of the Patnaik grading system, 95 cutaneous MCTs from 95 dogs were graded in a blinded study by 28 veterinary pathologists from 16 institutions. Concordance among veterinary pathologists was 75% for the diagnosis of grade 3 MCTs and less than 64% for the diagnosis of grade 1 and 2 MCTs. To improve concordance among pathologists and to provide better prognostic significance, a 2-tier histologic grading system was devised. The diagnosis of high-grade MCTs is based on the presence of any one of the following criteria: at least 7 mitotic figures in 10 high-power fields (hpf); at least 3 multinucleated (3 or more nuclei) cells in 10 hpf; at least 3 bizarre nuclei in 10 hpf; karyomegaly (ie, nuclear diameters of at least 10% of neoplastic cells vary by at least two-fold). Fields with the highest mitotic activity or with the highest degree of anisokaryosis were selected to assess the different parameters. According to the novel grading system, high-grade MCTs were significantly associated with shorter time to metastasis or new tumor development, and with shorter survival time. The median survival time was less than 4 months for high-grade MCTs but more than 2 years for low-grade MCTs.