Lung biopsies from 17 patients with cryptogenic fibrosing alveolitis of a cellular rather than fibrotic pattern were examined by transmission electron microscopy in the hope that such cases would show features of pathogenetic significance. Further selection was made by choosing minimally affected areas. There was no ultrastructural evidence of immune complex deposition but alveolar epithelial and capillary damage was frequently found (17 and 14 of the 17 cases respectively). Alveolar epithelial injury consisted of patchy necrosis and regenerative hyperplasia. Alveolar capillary injury consisted of cytoplasmic swelling and basement membrane thickening and reduplication. Many of these features have not been emphasized in previous reports and their prominence in early stages of the disease suggest that they may have pathogenetic significance, possible mechanisms of which are discussed. Similar findings identified during the course of this study in 8 asbestos workers suggest that similar pathogenetic mechanisms may operate in asbestosis.