Ten neurilemomas were studied by electron microscopy. Antoni A and B tissues were identified by light microscopy on semithin sections, and the corresponding areas on adjacent ultrathin sections were studied ultrastructurally. The Antoni B tissue definitely possessed features of degeneration in that the cells showed a detached basal lamina, a disrupted cell membrane, degenerated nuclei, and a significant accumulation of cytoplasmic granules and myelin figures. Added to these was intercellular edema with fibrin. The similarity of the granules in the cells of Antoni B tissue, cells of granular cell tumor, and Schwann cells in wallerian degeneration supports the conclusion that these three are related phenomena.