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The diagnosis of follicular epithelial neoplasms is an area of controversy. We provide our experience with common problems that practising pathologists face when confronted with follicular epithelial proliferations. One of the major issues is the recognition of the diagnostic nuclear features of papillary thyroid carcinoma and reactive cytologic atypia. We discuss the definitions of capsular invasion, vascular invasion, and extrathyroidal extension and their implications in cancer diagnosis and staging. We propose unified terminology for benign follicular epithelial proliferations in the setting of multinodular goiter. We also review challenges related to oncocytic change, malignant transformation in benign nodules, focal dedifferentiation, and the application of ancillary tools in thyroid pathology. We believe that this review contains comprehensive and up to date information that will be of value to pathologists who practice surgical pathology of thyroid.