A rare case of degenerative and inflammatory lesion of the stomach occurring in a 34-year-old woman is reported. Clinically, the lesion simulated gastric carcinoma because of the extensive involvement of the mucosa and submucosa by the process. Histologically, it was characterized by eosinophilic hyalinoid degeneration of smooth muscles in the muscularis mucosae as well as mucosal and submucosal blood vessels accompanied with foreign body giant cells and other inflammatory cells. The lesion occurred in association with chronic peptic ulcers, and a small submucosal nodule histologically compatible with inflammatory fibroid polyp coexisted within the area of this lesion. The patient has had no systemic disease and has been well for 4.5 years postoperatively. These clinical features suggest a localized nature of the lesion limited to the stomach. The term "hyalinoid giant cell gastritis" is proposed to describe this distinctive form of gastritis.