In this paper, the authors review recent topics of interest in relation to squamous dysplasia and squamous cell carcinoma in situ in Japan, and also the differences in diagnostic criteria for squamous cell carcinoma in situ between Japanese and Western pathologists. Photomicrographs of high-grade squamous dysplasia in Western textbooks of surgical pathology are judged in Japan to be squamous cell carcinoma in situ. Squamous cell carcinoma in situ can be histologically subdivided by the appearance of the basement membrane into the simple replacement type, showing a linear pattern, and the bulky outgrowth type, showing a wavy pattern. Squamous cell carcinoma in situ may also be classified into a total layer type, in which the entire epithelium is replaced by tumor cells, and a basal layer type in which the basal half is replaced by tumor cells. It is frequently observed that minute squamous cell carcinomas of the basal layer type, but not the total layer type, show signs of early stromal invasion into the lamina propria mucosae. These histologic findings strongly indicate that the basal layer type is not low-grade dysplasia but squamous cell carcinoma in situ.