The main purpose of this study is to focus on Swedish PE teachers' experiences with a criterion-referenced grading system and its practical consequences. It aims specifically at investigating the dimensionality of grades and how teachers reason and effectuate when grading students. The study consists of two parts: quantitative data collection of grades in PE given between 2000 and 2009 and 20 semi-structured interviews with PE teachers that were analyzed qualitatively. The study has shown that the principles of fair and equitable grading in Swedish PE should be strongly questioned due to lack of transparency, validity and reliability. Grading in Swedish PE seems to be arbitrary and the grading system is not accessible or transparent to the students. (Contains 1 note, 4 tables, and 1 figure.)