Objectives Recent public reporting initiatives in England highlight general practice variation in indicators of diagnostic activity related to cancer. We aimed to quantify the size and sources of variation and the reliability of practice-level estimates of such indicators, to better inform how this information is interpreted and used for quality improvement purposes. Design Ecological cross-sectional study. Setting English primary care. Participants All general practices in England with at least 1000 patients. Main outcome measures Sixteen diagnostic activity indicators from the Cancer Services Public Health Profiles. Results Mixed-effects logistic and Poisson regression showed that substantial proportions of the observed variance in practice scores reflected chance, variably so for different indicators (between 7% and 85%). However, after accounting for the role of chance, there remained substantial variation between practices (typically up to twofold variation between the 75th and 25th centiles of practice scores, and up to fourfold variation between the 90th and 10th centiles). The age and sex profile of practice populations explained some of this variation, by different amounts across indicators. Generally, the reliability of diagnostic process indicators relating to broader populations of patients most of whom do not have cancer (eg, rate of endoscopic investigations, or urgent referrals for suspected cancer (also known as ‘two week wait referrals’)) was high (≥0.80) or very high (≥0.90). In contrast, the reliability of diagnostic outcome indicators relating to incident cancer cases (eg, per cent of all cancer cases detected after an emergency presentation) ranged from 0.24 to 0.54, which is well below recommended thresholds (≥0.70). Conclusions Use of indicators of diagnostic activity in individual general practices should principally focus on process indicators which have adequate or high reliability and not outcome indicators which are unreliable at practice level.