This is a histological and biochemical study of cholesterol in the middle ear in various chronic otitis media syndromes of 22 cholesteatomatous temporal bones and 52 bioptic specimens. Only three of the temporal bones and 11 surgical specimens showed cholesterol crystals, all of which were in the granulation tissue surrounding the cholesteatoma and none in its midst. On the other hand, cholesterol crystals were also found in the inflammatory magma of an atelectatic ear, in ears with cholesterol granuloma, as well as in biopsies from simple chronic otitis media and secretory otitis media. These findings point out that cholesterol crystals may be found in the inflammatory magma of any long-standing middle ear inflammatory condition and is not specific for cholesteatoma or "cholesterol granuloma" ears. Biochemical analysis of mucus retrieved from secretory ears as well as of cholesterol granulomas, showed the presence of cholesterol and of very small amounts of cholesterol esters. Cell membranes also contain cholesterol and small amounts of cholesterol esters. This is in contrast to serum, as well as to the findings in atheromas, where cholesterol esters are relatively more abundant than cholesterol. The ratio of cholesterol to cholesterol ester in cholesterol granulomas and middle ear effusions is in fact the inverse of that found in serum--and serum cholesterol is therefore unlikely to be the origin of the former. Contrary to the popular concept, there is also no clinical, histological, or any other kind of evidence for local bleeding as the source of cholesterol crystals. The most likely source of cholesterol in middle ear effusions as well as of the crystalline deposits--is local tissue breakdown. The phenomenon as a whole may be viewed as a side-effect of the basic middle ear disorder. The reason for cholesterol going from solution to crystals is not known, yet experimental evidence implicates hypoxia.