In a retrospective study, 49 bone marrow biopsies (BMB) of patients with multiple myeloma (MM) were studied for its role in diagnosis and to determine histological parameters of prognostic significance. Sections were analyzed by 2 observers and classified according to: 1. Cytological grading according to differentiation of the neoplastic cells as plasmacytic, pleomorphic and plasmablastic. 2. Volume of infiltration: quantitating the percentage of myeloma cells in the biopsy. 3. Pattern of neoplastic infiltration. The overall marrow cellularity, presence of marrow fibrosis, micro-osteolesions and normal haematopoeisis were also studied. The bone marrow biopsy (BMB) was diagnostic for myeloma in five cases, where the aspirates were hypocellular: four had early myeloma and one had extensive marrow fibrosis. The pattern of infiltration was interstitial in 19 cases (39%), nodular in 19 cases (39%), and diffuse in 11 cases (22%). In majority of the cases (49%), the cell type was plasmacytic (24 cases), plasmablastic in 10 cases and pleomorphic in 15 cases. All cases of poorly differentiated cell type (plasmablastic) had a diffuse or nodular pattern of infiltration, whereas majority of the well-differentiated cell type had an interstitial pattern. The plasma cell burden in biopsy i.e the volume of infiltration was <10% in 8 cases, <50% in 19 cases and >50% in 22 cases and was used for histological staging of MM. Fibrosis was present in 30% of cases. Follow up was available in 11 cases, and cases with poorly differentiated myeloma, diffuse pattern of infiltration and dense fibrosis had survival less than one year. Cases of well differentiated myeloma, interstitial pattern of infiltration and plasma cell load less than 20% with absence of fibrosis had a more than 5-year survival. Different series have quoted that all these histological parameters provide valuable prognostic information, wherever other modalities like beta 2 microglobulin and IL-6 levels, etc are not available. The effects of therapy can also be monitored by sequential biopsies.