Objective: Regarding cytological findings of squamous dysplasia, a comparison was made between a three-tiered classification – low-grade squamous intraepithelial lesion (LSIL), high-grade SIL/cervical intraepithelial neoplasia 2 (HSIL/CIN2), and HSIL/CIN3 – and a two-tiered classification – LSIL and HSIL. The respective risk for CIN2+ and CIN3+ was calculated to make decisions regarding management. Methods: A total of 2,949 women with first-time cytologic findings of squamous dysplasia (LSIL, HSIL/CIN2, or HSIL/CIN3) between January 2013 and June 2016 were enrolled. Subsequent cytological findings and histological diagnoses were evaluated until August 2018. For each category of findings, the risk for CIN2+ and CIN3+ was determined by Kaplan-Meier estimates. The differences in risk between the cytological categories were checked for significance using the log-rank test. Results: For the categories LSIL, HSIL/CIN2, and HSIL/CIN3, the risk for CIN2+ after 12, 24, and 60 months was 3.4, 9.4, and 23.3%; 35.2, 44.8, and 59.8%; and 95.5, 97.8, and 98.9%, respectively. For CIN3+ the risk was 2.0, 5.5, and 13.5%; 28.6, 35.6, and 48.3%; 91.3, 95.6, and 97.9%, respectively. The differences in risk between the categories are highly significant, respectively (p < 0.001). Conclusion: A three-tiered classification of squamous dysplasia such as the Munich Nomenclature III for cytology is suitable for risk-adapted clinical management, especially to avoid overdiagnosis and overtreatment.