Traumatic degeneration of myelinated fibers was studied by electron microscopy over 5 days following transection of mouse sciatic nerve. Special attention was paid to the mechanism which separates the degenerating part, while preserving the viable part of the axon. Immediately after transection, the opened end of the proximal stump revealed extensive subcellular changes including the disorganization of neurofilaments, and disruption of mitochondria and axonal endoplasmic reticulum (SER). Subsequently, vesicles of round and tubular profiles filled up the whole area of the stump end, and proximal to it appeared a neurofilament-predominant area characterized by randomly oriented neurofilaments and normally appearing mitochondria and SER. Characteristic membranous demarcations occurred in early periods at the border between the vesicle accumulation and the neurofilament-predominant areas, and later also within these areas. The demarcation membranes formed both by invagination of the surface plasma membrane and, probably, by fusion of the large vesicles. These became prominent with time, dividing the axoplasm into compartments of varying sizes, which gradually underwent degeneration and were liberated from the parent axon. Occurrence of autophagic vacuoles was characteristic of the degenerating portions of the parent axon. Thus, by the function of demarcation membranes, the parent axon to be preserved could remain membrane-bound, while the degenerating parts were shed off.