The gross morphologic features, histologic features, and synthesis of collagenase and prostaglandin E2 by rheumatoid synovial cells injected into athymic nude mice were studied. A single cell suspension of 2 X 10(7) cells was inoculated subcutaneously into the dorsum of each mouse. In 8 out of 9 mice injected with cells from 6 different patients, rheumatoid synovial cells remained at the injection site for 20-30 days. During this time they became organized into a pannuslike structure with fibroblasts, occasional multinucleated cells, numerous blood vessels, and diffuse collagen fibers. No lymphocytes were seen. Compared with cells cultured in vitro at Day 0, removal, dissociation, and culture of the implanted material at Day 21 revealed a decrease in the percentage of dendritic (stellate) cells known to be associated with collagenase and PGE2 production. However, cells passed through nude mice retained the ability to synthesize both of these compounds. Implantation of rheumatoid synovium into nude mice may provide a way of studying factors influencing the proliferative and destructive lesion of rheumatoid arthritis.