The prognostic role of HER-2 has been established in breast cancer but remains controversial in colorectal cancer. In this study, 170 archival specimens of Dukes' B and C colorectal cancer were analysed immunohisto-chemically, using an anti-HER-2 monoclonal antibody HM64.13. Immunostaining was classified as cytoplasmic or membranous, and the intensity of the immunostaining was graded negative, weak or strong. The association between these scores and survival was estimated using Cox survival analyses. Overall, 87% of cases showed cytoplasmic HER-2 staining, with 54% exhibiting strong intensity cytoplasmic immunostaining. Membranous HER-2 was seen in 41% of cases, with most of these being of strong intensity. No correlation with clinical outcome was seen with membranous HER-2. Positive cytoplasmic immunostaining was found to be associated with a significantly better overall survival (HR 0.46, CI95 0.24-0.87) in the Dukes C cancers, but no survival benefit was seen in the Dukes' B cancers. Tumour grade, depth of tumour invasion and positive apical node were also found to be independent prognostic factors in Dukes' C cancers. We conclude that HER-2 over-expression occurs in a significant number of colorectal cancers. Since cytoplasmic HER-2 is incapable of transmitting the strong mitogenic signal via heterodimerization with other members of the Epidermal Growth Factor Receptor (EGFR) family, this may partly explain the correlation between cytoplasmic HER-2 over-expression and a better prognosis in the Dukes' C colorectal cancers. In addition, high levels of membraneous HER-2 in colorectal cancer could make HER-2 a good target for monoclonal antibody-based immunotherapy.