Electron microscopy of atherosclerotic arterial tissue commonly fails to distinguish lipid vesicles from droplets, especially when these are found in the extracellular space. The distinction is important, because vesicular or membranous lipid is composed of phospholipid and unesterified cholesterol, whereas neutral lipid in droplet form implies the presence of cholesteryl ester in atherosclerosis. A new procedure with sequential tannic acid and p-phenylenediamine treatments of osmicated tissue (TA-PDA) allows reliable ultrastructural discrimination of lipid vesicles and droplets. The multilamellar character of many vesicles is revealed. Extracellular droplets are found to possess many surface pits associated with membranous blebs. Pitting of droplets is especially evident after the use of an alternative tissue processing technique, the osmium-thiocarbohydrazide-osmium (OTO) sequence applied en bloc. The two complementary techniques will prove useful for electron microscopic studies of atherosclerotic and other lipid-rich tissues.