Small, circumscribed electrolytic lesions were made in the upper cervical corticospinal tract in adult rats. In the centre of the lesion, the axons and all other tissue elements were totally destroyed. Surrounding this region of destruction is an area of tissue which is only partially damaged. In this area TUNEL positive staining of contiguous rows of tract glial cells indicates massive oligodendrocytic apoptosis at 1-3 days after operation, but axons, astrocytes and blood vessels survive. From around 4 days, the corticospinal axons in this area are demyelinated, and the microglia contain ingested myelin, identified in electron micrographs as characteristic MBP immunoreactive laminar cytoplasmic bodies. After around 3 weeks, large numbers of Schwann cells, continuous with those on the pial surface of the spinal cord, accumulate along the lesion track and selectively infiltrate the perilesional reactive area, where they mingle intimately with the phagocytic microglia. Electron micrographs show that at this time basal lamina-enclosed Schwann cell processes establish non-myelinated ensheathment of axons. From around 4 weeks after operation, prominent Schwann cell myelination is indicated by P0 immunoreactivity, and peripheral type, one-to-one myelination in electron micrographs. Thus the effect of the selective loss of oligodendrocytes is to first activate microglia, and then to induce a replacement of myelin by Schwann cells.