The immunohistology of the synovium-cartilage junction was studied in 8 normal human knees, using monoclonal antibodies. In all joints at the junction with synovium, a vascular, wedge-shaped tongue of tissue was found to cover the cartilage surface. This marginal tissue overlying cartilage was in continuity with and was immunohistochemically similar to the adjacent synovial tissue, and contained cells possessing class II HLA antigens and antigens present on macrophages and type B synoviocytes. Periosteal tissue adjacent to the synovium-cartilage junction contained not only macrophages and other class II-positive cells, but also cells and matrix that stained with monoclonal antibodies specific for articular cartilage (keratan sulfate and type II collagen). This study demonstrates the presence of immunocompetent cells in tissue overlying the cartilage surface and adjacent to bone in normal human joints. It is likely that pannus in chronic inflammatory rheumatic disease develops by the recruitment of inflammatory cells augmenting this normal marginal tissue. Furthermore, overgrowth of tissue onto the cartilage surface may not be necessary in the pathogenesis of joint destruction in rheumatoid arthritis. In addition, our findings suggest that cells in the periosteum, rather than those in the marginal synovium, may be involved in attempted "repair" mechanisms, such as osteophyte formation.