Capsular incision (CI) refers to the urologist transecting either benign or malignant prostatic tissue, where the edge of the prostate in this region is left within the patient. Histologic assessment of CI is difficult and its diagnosis varies among pathologists. Between 1993 and 2004, we reviewed 186 radical prostatectomies that were signed out as either: (1) CI into tumor in otherwise organ-confined disease [elsewhere no extra-prostatic extension (EPE), seminal vesicle invasion, or lymph node spread] (n=143); (2) positive surgical margin in an area difficult to distinguish EPE from CI into tumor in otherwise organ-confined disease (n=36); or (3) equivocal positive surgical margin in an area difficult to distinguish organ-confined disease with tumor close to resection margins (OC M-) from CI into tumor in otherwise organ-confined disease (n=7). On review, CI with a positive margin was confirmed in 83.2% of cases. Of cases signed out with margins positive where it was difficult to distinguish CI from EPE, CI was confirmed in 52.8% of cases. Cases with equivocal positive margins with either CI or OC M- were considered CI with positive margins in 57.1% of cases on review. Cases in all 3 groups not considered positive margins with CI were on review equally divided between diagnoses of organ-confined margin negative and EPE with positive margins. The locations of the 39 cases originally misdiagnosed as definitive or questionable CI with positive margins were posterolateral (N=19, 48.7%), distal (N=12, 30.8%), posterior (N=6, 15.4%), and anterolateral (N=2, 5.1%). Familiarity with different patterns of EPE in different anatomic locations and applying strict criteria for diagnosing CI into tumor can minimize overcalling CI and can provide accurate feedback to urologists to prevent iatrogenic positive margins.