Clinical and pathologic data of 54 patients with clinically localized transitional cell tumors of the upper urinary tract were reviewed to determine the significance of tumor grade and stage on patient survival. There were 43 tumors of the renal pelvis (one bilateral) and 11 tumors of the ureter. The primary tumor was staged by the new TNM classification into low stage (Ta: limited to mucosa; T1: lamina propria invasion) and high stage (T2: muscularis invasion; T3; invasion beyond the muscularis). Tumors were low stage (Ta/T1) in 28 cases (51.8%) and advanced (T2/T3) in 26 cases (48.2%). Twenty-five of 54 (46.3%) of the patients had low grade (Grades 1 and 2) and 29 of 54 (53.7%) had high grade (Grades 3 and 4) tumors. Median survival for all patients from date of diagnosis was 31 months, with a 5-year survival rate of 45.8%. Grade (low/high) matched stage (low/high) in 45 of 54 patients (83%). Median survival for patients with low grade tumors was 66.8 months compared to 14.1 months in patients with high grade tumors. Median survival for low stage tumors was 91.1 months and for high stage tumors was 12.9 months. These differences in survival related to both tumor stage (P = 0.001) and grade (P = 0.004) were statistically significant by log-rank test. Fourteen of the 54 patients (25.9%) developed local recurrence and 29 (53.7%) developed distant metastases. The lung was the most common site of metastasis. Eighteen patients (33.3%) had or developed transitional cell carcinoma of the bladder, which preceded the diagnosis of transitional cell carcinoma of the upper tract in seven cases and developed subsequently in 11 cases. Primary tumor stage by the new TNM classification is a better predictor of prognosis than tumor grade, although both variables are strongly predictive of patient course and survival. The advantages of the new TNM classification are discussed.