Every January for more than 40 years, the American Cancer Society (ACS) has estimated the total number of cancer deaths that are expected to occur in the United States and individual states in the upcoming year. In a collaborative effort to improve the accuracy of the predictions, investigators from the National Cancer Institute and the ACS have developed and tested a new prediction method. The new method was used to create the mortality predictions for the first time in Cancer Statistics, 2004 and Cancer Facts & Figures 2004. The authors present a conceptual overview of the previous ACS method and the new state-space method (SSM), and they review the results of rigorous testing to determine which method provides more accurate predictions of the observed number of cancer deaths from the years 1997 to 1999. The accuracy of the methods was compared using squared deviations (the square of the predicted minus observed values) for each of the cancer sites for which predictions are published as well as for all cancer sites combined. At the national level, the squared deviations were not consistently lower for every cancer site for either method, but the average squared deviations (averaged across cancer sites, years, and sex) was substantially lower for the SSM than for the ACS method. During the period 1997 to 1999, the ACS estimates of deaths were usually greater than the observed numbers for all cancer sites combined and for several major individual cancer sites, probably because the ACS method was less sensitive to recent changes in cancer mortality rates (and associated counts) that occurred for several major cancer sites in the early and mid 1990s. The improved accuracy of the new method was particularly evident for prostate cancer, for which mortality rates changed dramatically in the late 1980s and early 1990s. At the state level, the accuracy of the two methods was comparable. Based on these results, the ACS has elected to use the new method for the annual prediction of the number of cancer deaths at the national and state levels.