The pathologic material from 56 patients diagnosed initially as Ewing's sarcoma of the distal extremity and treated on National Cancer Institute protocols between 1968 and 1984 was reviewed and correlated with clinical outcome. Histologically, the tumors were categorized, based on recent pathologic criteria, into three diagnostic groups: (1) typical Ewing's sarcoma, (2) atypical Ewing's sarcoma, and (3) other (predominantly peripheral neuroepithelioma [PN]). Thirty-two patients (57%) had typical Ewing's, 13 (23%) were atypical, and 11 (20%) were in the "other" diagnostic category (seven [13%] PN, two primitive rhabdomyosarcoma, one primitive sarcoma of bone, and one synovial cell sarcoma). No cases of metastatic neuroblastoma, osteosarcoma, or lymphoma were found. Forty-five patients had localized disease at diagnosis; 11 had metastases. Patients with typical Ewing's sarcoma were less likely to have metastatic disease at the time of diagnosis. Only two of 32 patients with typical Ewing's sarcoma had metastases compared with nine of 24 patients in the two other groups. The pattern of relapse was also different in these other groups compared with typical Ewing's patients; five patients developed lymph node metastases and two patients developed brain metastases. Although the presence of metastatic disease at diagnosis was a strong negative prognostic factor, our histologic grouping was independently prognostic of clinical outcome in patients with localized disease. Patients with typical osseous Ewing's sarcoma had an improved overall survival (P2 = 0.03) and patients with other tumors (neither typical nor atypical Ewing's sarcoma) had a poorer disease-free survival (P2 = 0.02). Since no generally accepted histopathologic prognostic criteria exist for Ewing's sarcoma, the potential value of our proposed classification should be evaluated in a larger retrospective and a prospective study.