Five of nine active tandem mill operators exposed at work to aerosolized hydrocarbon mist were referred for evaluation of respiratory complaints. The worker with the longest exposure had reduced lung volumes; he was admitted to the hospital for detailed study. Exercise studies revealed work load limited by ventilation and arterial oxygen desaturation. Flexible fiberoptic bronchoscopy with bronchoalveolar lavage and transbronchial biopsy revealed evidence of lipoid pneumonia. Assessment of the mill revealed levels of respirable oil mist by personal samplers throughout the area far below the currently accepted standard of 5 mg/M3. These findings confirm a 20-year-old hypothesis of J.G. Jones regarding the hazard of oil mist in this industrial setting.