The Papanicolaou smear is a highly effective screening test for the detection of cervical neoplastic changes. The success of the test has resulted in unrealistic expectations of the accuracy of the test by both referring medical practitioners and the public. However, as with any pathological test, it has irreducible false negative and positive rates. This report is a comparison between interpretations based on cytological and histological tests and was undertaken to estimate the sensitivity of the Papanicolaou test as practised in Hong Kong. The overall absolute concordance rate for the study was 51.2%. The concordance rates within one diagnostic category were 63.9% and 74.6% for low- and high-grade squamous intraepithelial lesions respectively. The overall sensitivity of the test was 91.7% with a positive predictive value of 93.5%. Ten percent of the error rate was attributed to laboratory error; the remainder was attributed to sampling error and poor smear preparation. Forty-five percent of cases of atypical squamous cells of undetermined significance showed evidence of cervical intraepithelial neoplasia on subsequent biopsy. Follow-up biopsies of low-grade squamous intraepithelial lesions also showed as many lesions from cervical intraepithelial neoplasia grade I as from grades II and III. These findings suggest that colposcopies and biopsies should be performed as soon as possible rather than to repeat the smears in 3 to 6 months. The results of the study may provide guidelines for formulating follow-up recommendations.