The process of connective tissue breakdown in chronic otitis media is described in the context of recent advances in our understanding of collagen degradation and bone resorption. The significance of the initial step in collagen breakdown, brought about by the action of a specific collagen dissolving enzyme is emphasized in terms of recent studies in other chronic inflammatory diseases characterized by connective tissue breakdown. Bone resorption, a characteristic feature of chronic otitis media, requires the breakdown of collagen, which comprises over 90 percent of bone protein. Evidence in support of collagenase in bone resorption from adjacent tissue (in this case, inflammatory connective tissue) would require identification of the enzyme in cells involved in the inflammatory process adjacent to the resorbing bone. Collagenase was found localized in frozen sections of canal wall skin, middle ear granulation and in cholesteatoma by a specific binding of the enzyme with an antiserum produced against purified human skin collagenase. The antigen antibody complex was labelled with fluorescein. Collagenase appeared in the subepithelial connective tissue of cholesteatoma, granulation tissue from the middle ear and the dermis of canal skin; but was not seen in the keratin layer, epithelium or the epidermal appendages. The enzyme appeared within certain fibroblasts, macrophages and endothelial cells of capillary buds. Collagenase enhanced by chronic inflammation attacks the intact collagen molecule, making it susceptible to further digestion by other proteases that are also products of inflammation. This process brings about resorption of connective tissue and bone.