Optimum kernel quality is important at all levels of groundnut production and utilisation because of its value as a direct or processed food. Kernel quality can be reduced by many factors but in South Africa the groundnut pod nematode, Ditylenchus africanus, is responsible for severe losses in groundnut crops. The objective of this study was to evaluate in microplots the effect of D. africanus on groundnut yield in terms of commercial grading principles. Differential initial population densities (Pi) of between zero to 7000 and zero to 20 000 nematodes per plant were inoculated, respectively, in two separate trials over two consecutive seasons. Significant non-linear relationships were recorded between Pi and nematode densities at harvest (Pf), between Pi and downgrading of kernels (% unsound, blemished and soiled (UBS)) and between % UBS and income earned per tonne. No relationships were found between initial or final nematode population densities and kernel fresh weight. Sufficient evidence was provided that damage by D. africanus on groundnut could be expressed in terms of commercial yield grading stipulations. Therefore, it is possible to estimate the effect of this nematode in monetary terms and to consider control measures in terms of financial gains or losses.