The present study was undertaken to compare the efficacy of needle core biopsy (NCB) of the breast with fine‐needle aspiration cytology (FNAC) in breast lesions (palpable and non‐palpable) in the Indian set‐up, along with the assessment of tumor grading with both the techniques. Fifty patients with suspicious breast lesions were subjected to simultaneous FNAC and ultrasound‐guided NCB following an initial mammographic evaluation. Cases were categorized into benign, benign with atypia, suspicious and malignant groups. In cases of infiltrating duct carcinomas, grading was performed on cytological smears as well as on NCB specimens. Both the techniques were compared, and findings were correlated with radiological and excision findings. Out of 50 cases, 18 were found to be benign and 32 malignant on final pathological diagnosis. Maximum number of patients with benign diagnosis was in the fourth decade (42.11%) and malignant diagnosis in the fourth as well as fifth decade (35.48% each). Sensitivity and specificity of mammography for the diagnosis of malignancy was 84.37% and 83.33%, respectively. Sensitivity and specificity of FNAC for malignant diagnosis was 78.15% and 94.44%, respectively, and of NCB was 96.5% and 100%, respectively. But NCB had a slightly higher specimen inadequacy rate (8%). NCB improved diagnostic categorization over FNAC by 18%. Tumor grading in cases of IDC showed high concordance rate between NCB and subsequent excision biopsy (94.44%) but low concordance rate between NCB and FNAC (59.1%). NCB is superior to FNAC in the diagnosis of breast lesions in terms of sensitivity, specificity, correct histological categorization of the lesions as well as tumor grading. Diagn. Cytopathol. 2007;35:681–689. © 2007 Wiley‐Liss, Inc.