BACKGROUND: AJCC staging of pancreatic cancer (PAC) is used to determine prognosis, yet survival within each stage shows wide variation and remains unpredictable. We hypothesized that tumor grade might be responsible for some of this variation and that the addition of grade to current AJCC staging would provide improved prognostication. METHODS: The Surveillance, Epidemiology, and End Results (SEER) database (1991-2005) was used to identify 8082 patients with resected PAC. The impact of grade on overall and stage-specific survival was assessed using Cox regression analysis. Variables in the model were age, sex, tumor size, lymph node status, and tumor grade. RESULTS: For each AJCC stage, survival was significantly worse for high-grade versus low-grade tumors. On multivariate analysis, high tumor grade was an independent predictor of survival for the entire cohort (hazard ratio [HR] 1.40, 95% confidence interval [95% CI] 1.31-1.48) as well as for stage I (HR 1.28, 95% CI 1.07-1.54), stage IIA (HR 1.43, 95% CI 1.26-1.61), stage IIB (HR 1.38, 95% CI 1.27-1.50), stage III (HR 1.28, 95% CI 1.02-1.59), and stage IV (HR 1.58, 95% CI 1.21-2.05) patients. The addition of grade to staging results in a statistically significant survival discrimination between all stages. CONCLUSIONS: Tumor grade is an important prognostic variable of survival in PAC. We propose a novel staging system incorporating grade into current AJCC staging for pancreas cancer. The improved prognostication is more reflective of tumor biology and may impact therapy decisions and stratification of future clinical trials.