An Honors-Pass-Fail (H-P-F) grading system was introduced experimentally to replace A-B-C-F grading in all graduate education courses. H-P-F was more effective than A-B-C-F grading in distinguishing between exceptional and average student achievement. The percentage of highest possible grades declined from 50 percent A's to about 25 percent H grades where it stabilized for 2 successive years. The new grading system was evaluated twice by graduate students and faculty. At the end of the first year, student approval was overwhelming, whereas the faculty was about equally divided among instructors who approved H-P-F and those who either disapproved or were uncertain. In the second year, student and faculty approval was slightly greater than in the first year. (Author)