Objective: To identify the best-suited cephalometric parameter for assessing the sagittal skeletal discrepancy in the Indian population. Design: An in vitro, observational, single-blinded, retrospective study. Setting: Department of Orthodontics and Dentofacial Orthopaedics. Methods: A total of 94 lateral cephalograms were used in this study. The study involved one key person and two examiners. The key person collected the radiographs, coded, analysed and classified them into three groups (skeletal classes I, II and III). Subsequently, the coded radiographs were independently analysed by the two examiners. They classified the cases by matching a minimum of 6 out of 11 parameters. On completion of diagnosis by the examiners, the samples were decoded and matched with the original diagnosis given by the key person. The samples in which identification of a particular cephalometric parameter matched the original evaluation as given by the key person was regarded as correctly diagnosed. The number of correctly assessed cases was used to judge the diagnostic performance of all the parameters in all the cases. Cross-validation of the method was performed, and a diagnostic algorithm was developed for diagnosis. Results: β angle and Pi angle showed a positive predictive value of 1 in both skeletal class I and II cases. ANB angle, W angle and HBN angle showed a positive predictive value of 1 in skeletal class III cases. Conclusion: No single cephalometric parameter can independently be used to diagnose sagittal skeletal discrepancy in all cases. However, a conclusive diagnosis on the type of sagittal skeletal malocclusion can be made by using a simple and easy to use diagnostic algorithmic process having a combination of cephalometric parameters.