To assess intra- and inter-observer agreement in the morphological evaluation of mandibular cortical bone on panoramic radiographs, to examine factors affecting the diagnosis, and to determine causes of diagnostic discrepancy. Three experienced observers evaluated mandibular cortical shape on panoramic radiographs of 228 females, and divided the images into three classes. The intra- and inter-observer agreements were calculated. The effect of mandibular cortical width on shape classification was examined. Causes of diagnostic discrepancy were investigated. Overall intra- and inter-observer kappa values in diagnosing mandibular cortical shape were 0.58-0.76 and 0.62-0.69, respectively. The kappa values in diagnosing Class 2 were low. In radiographs diagnosed as Class 2 and Class 3, the ranges of mandibular cortical width overlapped. Discrepancies in diagnosis were caused by slight resorption at the endosteal margin of the cortical bone, endosteal cortical residues near the thinned smooth cortex, and superimposition of the hyoid bone over the mandible. Inter-observer agreement in evaluating mandibular cortical shape was moderate to substantial. Diagnostic discrepancies were mainly caused by differences in evaluation of the endosteum near the cortical bone.