A 56-year-old male presented with mild gait disturbance and short-term memory disturbance. Computed tomographic scans revealed an isodense mass with a large cyst in the left lateral ventricle, extending to the right. The tumor was removed totally via the left frontal transcortical approach. Light microscope examination found clusters of isomorphic cells separated by a dense fibrillar matrix. No ependymal rosettes or blepharoplasts were found. Some cluster cells had positive immunoperoxidase staining for glial fibrillary acidic protein and S-100 protein. Electron microscope observation found tumor cells with gap junctions and zonula adherens resembling the junctional complexes of normal ependymal cells, many microvilli and cilia, and long processes containing abundant glial fibrils. Such "transitional cells" may be important in establishing the origin of subependymoma.