We applied the classification system of Marino and Müller-Hermelink (Virchows Arch A Pathol Anat Histopathol 407:119-149, 1985) and Kirchner and Müller-Hermelink (Prog Surg Pathol 10: 167-189, 1989) to 122 thymic epithelial tumors to evaluate the utility of this classification and to determine its correlation with invasiveness, follicular lymphoid hyperplasia, myasthenia gravis, and immunophenotype. The majority of cases could be classified according to this scheme: eight cases (7%) were medullary thymoma, 34 cases (28%) were mixed thymoma, 20 cases (16%) were predominantly cortical (organoid) thymoma, 22 cases (18%) were cortical thymoma, 32 cases (26%) were well-differentiated carcinoma (WDC), two cases (2%) were high-grade carcinoma, and four cases (3%) were unclassifiable. We report a detailed histologic analysis of these subtypes, with criteria for diagnosis. We propose that the term "organoid thymoma" be replaced by "predominantly cortical thymoma." We also observed a previously unrecognized subtype of WDC with spindle-shaped epithelial cells, which must be distinguished from medullary thymoma. There was a strong correlation between histologic subtype and invasion (P < .0001). All medullary and mixed thymomas were either completely encapsulated (64%) or had only invasion through the capsule (36%). Organoid and cortical thymomas showed an intermediate degree of invasiveness, with 36% invasive into mediastinal fat and 14% into adjacent structures. All the cases of WDC were invasive either through the capsule (19%) or into adjacent structures (81%); five cases (16%) also showed distant spread in the form of pleural seeding (four cases) or lymph node metastasis (one case). Microscopic evaluation disclosed invasion in a substantial number of cases (28.5%) thought by the surgeon to be encapsulated. The presence of follicular lymphoid hyperplasia, either within the tumor, in the residual normal thymus, or in both, was a significant predictor of myasthenia gravis (P < .0015); there was an increased association of myasthenia gravis and thymomas with cortical type epithelium (organoid thymoma, cortical thymoma, and WDC). There was no correlation between epithelial cell morphology and antigen expression; however, the immunophenotype of the associated lymphocytes corresponded closely to the morphologic classification of the thymomas. The Müller-Hermelink morphologic classification can be applied to most cases of thymoma and strongly predicts invasive behavior. The correlation of lymphocyte immunophenotype with the morphologic classification of the epithelial cells suggests that it is biologically accurate.