The determination of prognosis in patients with esophageal squamous cell carcinoma (ESCC) is primarily based on staging according to the TNM-classification, whereas conventional grading is of minor clinical importance because of its deficiencies in prognostic patient stratification. Recently, a novel, highly prognostic grading scheme based on budding activity and cell nest size has been proposed for squamous cell carcinoma (SCC) of both pulmonary as well as oral origin. In order to investigate the utility and transferability of this approach to ESCC, we evaluated budding activity and cell nest size, as well as other histomorphologic characteristics, in a cohort of 135 primarily resected tumors and correlated the results with clinicopathologic and outcome parameters. High budding activity and small cell nest size showed a strong association with reduced overall, disease-specific, and disease-free survival (P<0.001, respectively) in ESCC. The combination of both markers in a 3-step grading system showed excellent prognostic separation of well-differentiated (G1), moderately differentiated (G2), and poorly differentiated (G3) carcinomas (P<0.001). The hazard ratio for disease-free survival in multivariate analysis under inclusion of stage was 2.97 for G2 and 5.42 for G3 ESCC (P<0.001). World Health Organization–based grading had no prognostic impact. Taken together, our data prove the value of tumor budding and cell nest size as excellent outcome predictors in ESCC and validate the utility of a previously established grading scheme proposed for oral and pulmonary SCC in this tumor entity. Ultimately, these combined efforts may result in a universal grading system for SCC regardless of the site of origin.