Date: 201306
Local time of day: 1801-2400
Location: ZZZ.ARTCC, US
Flight conditions: VMC
Light: Night
Aircraft: B737-300
Operator: Air Carrier
Operating under: Part 121
Flight plan: IFR
Mission: Passenger
Flight phase: Climb
Airspace: Class A ZZZ
ATC / advisory: Center ZZZ
Aircraft component: Altimeter
Component problem: Improperly Operated
Reporter organization: Air Carrier
Reporter function: Captain
Reporter qualification: Flight Crew Air Transport Pilot (ATP)
Human factors: Human-Machine Interface
Second reporter function: First Officer
Anomaly: Deviation - Altitude Overshoot; Deviation / Discrepancy - Procedural Clearance; Deviation / Discrepancy - Procedural Published Material / Policy
Detector: Person Air Traffic Control
When detected: In-flight
Result: Air Traffic Control Issued New Clearance; Air Traffic Control Issued Advisory / Alert; Flight Crew Overcame Equipment Problem
Contributing factors: Aircraft; Procedure; Human Factors
Primary problem: Procedure

Narrative: We were on our fifth of five legs; at night/VMC; in a 737.... We had two unscheduled aircraft swaps in the last two legs. The passenger loads were light; so despite the swaps; we were on time and not feeling rushed. The aircraft just came from Maintenance and was on its first flight of the day. The only remarkable Maintenance item performed was a CAT III recertification. The preflight and checklists were all accomplished and appeared normal. The departure was uneventful. Center cleared us to climb and maintain FL280. The altitude was properly set; crosschecked; and communicated. The appropriate altitude callouts were made. As we were leveling off at FL280; [Center] said; 'It appears you are still climbing. You are now cleared to climb and maintain FL300.' Confused; we stated we showed we were level at FL 280. [Center] said they showed us at FL290. Crosschecking all of our altimeters; they displayed FL280. I then looked more closely at our altimeter settings and noticed they were all set to 28.92. We corrected the setting and continued a climb to FL300. At level off; [Center] concurred that we were at the correct altitude. Somehow; all of the aircraft altimeter settings had been changed to 28.xx. During the preflight; as the First Officer and I set the altimeters to the current setting; the last two digits were close enough to the current setting that we never noticed that they were actually at 28.xx rather than 29.xx. The hundreds foot pointer was close enough to field elevation and within tolerances with the other altimeters that we never noticed the thousand foot pointer was showing us 1;000 feet low. Poor aircraft lighting at night and small displays also compounded the chances of missing the incorrect setting. We both missed seeing the incorrect setting during the before start checklist and climb checklist as I read back 29.xx set. Our minds are conditioned to look for 29.xx or 30.xx; not 28.xx. More attention may have prevented the mistake; but under the conditions; I believe this would have gone undetected more often than not. The bigger question is how the altimeters got set to 28.xx; and if it was part of a Maintenance action; why wasn't there a procedure or checklist in place to set them back to 29.xx. In a -700; this is not an issue as the display is bigger; more visible; and hitting the STD button on the climb would have corrected the mistake. In a -300 with poor lighting and small displays; setting the altimeters to 28.xx created a significant safety issue.


Second narrative: Narrative 2 contains no additional information.


Synopsis: B737-300 flight crew missed the fact that all of the aircraft altimeters had been set to 28.xx and leveled off 1;000 FT above assigned Flight Level.