Purpose: Our aim was to analyze grading variation between pathology laboratories and between pathologists within individual laboratories using nationwide real-life data. Methods: We retrieved synoptic ( n = 13,397) and narrative ( n = 29,377) needle biopsy reports from the Dutch Pathology Registry and prostate-specific antigen values from The Netherlands Cancer Registration for prostate cancer patients diagnosed between January 2017 and December 2019. We determined laboratory-specific proportions per histologic grade and unadjusted odds ratios (ORs) for International Society of Urological Pathologists Grades 1 vs. 2–5 for 40 laboratories due to treatment implications for higher grades. Pathologist-specific proportions were determined for 21 laboratories that consented to this part of analysis. The synoptic reports of 21 laboratories were used for analysis of case-mix correction for PSA, age, year of diagnosis, number of biopsies and positive cores. Results: A total of 38,321 reports of 35,258 patients were included. Grade 1 ranged between 19.7% and 44.3% per laboratory (national mean = 34.1%). Out of 40 laboratories, 22 (55%) reported a significantly deviant OR, ranging from 0.48 (95% confidence interval (CI) 0.39–0.59) to 1.54 (CI 1.22–1.93). Case-mix correction was performed for 10,294 reports, altering the status of 3/21 (14%) laboratories, but increasing the observed variation (20.8% vs. 17.7%). Within 15/21 (71%) of laboratories, significant inter-pathologist variation existed. Conclusion: Substantial variation in prostate cancer grading was observed between and within Dutch pathology laboratories. Case-mix correction did not explain the variation. Better standardization of prostate cancer grading is warranted to optimize and harmonize treatment.