Pathogenesis of nodule formation was studied in over 100 nodular goiters from a subendemic area. 60 surgical specimens were autoradiographed. Only one classical, well-encapsulated adenoma was detected. All other nodules were incompletely encapsulated and consisted of follicles that were morphologically and functionally identical to those of nonnodular parenchyma. Most characteristic was the tremendous interfollicular heterogeneity appearing on autoradiographs. Nodular goiters contain multiple foci and strands of fibrous tissue, which result from scarring of multiple hemorrhagic necroses occurring during goiter growth. Therefore, the slowly growing number of newly formed follicles has to squeeze into the meshes of an inelastic network of connective tissue. Nodular growth pattern is the inevitable consequence. Some particular nodules expand because of excessive accumulation of colloid. We conclude that most thyroid nodules in long-standing goiters consist of ordinary, polyclonal goiter follicles which expand in nodular fashion because they replicate within a mold made out of a poorly extensible network of connective tissue.