The term dysplasia (intraepithelial neoplasia) is used to refer to neoplastic but non-invasive epithelium. Dysplasia in the gastrointestinal tract is considered a carcinoma precursor and a marker of high cancer risk for the site at which it is found. It is diagnosed by pathologists using a set of cytological and architectural features. There are many pitfalls in the diagnosis of gastrointestinal dysplasia. One reason for difficulty in dysplasia diagnosis is the significant heterogeneity in the appearances of each grade of dysplasia. In addition, the features that characterise dysplasia are only subtly different from those of regenerating epithelium, particularly at the low end of the spectrum, making this distinction difficult. For these reasons, and because of significant implications of this diagnosis for patient care, the interpretations of biopsies taken for dysplasia surveillance are considered challenging by most pathologists. In this article, we review definition, classification, and histological features and grading of gastrointestinal dysplasia with focus on Barrett's oesophagus (BE) related dysplasia, gastric epithelial dysplasia (GED) and dysplasia arising in the background of inflammatory bowel disease (IBD). We also discuss observer variability and the role of adjunctive markers in dysplasia diagnosis, and limitation with regard to surveillance of patients with BE and IBD due to sampling error.