Twenty-nine cases of hemangioendothelioma (H.E.) of the bone have been studied. In addition to the clinical and radiologic features of the tumor, attention was principally paid to the relationships between a tentative histologic grading of malignancy and the clinical course and final outcome of the cases. Three histologic grades are identified: Grade I H.E., Grade II H.E., and Grade III H.E. (or hemangiosarcoma). Grades I and II H.E. are frequently multicentric in the same lower limb. Grade I H.E. has a constantly good prognosis. It may remain stationary for several years even without treatment and it may be cured even by curettage or radiation. Grade II H.E. often has a good prognosis. In one of our cases the initial biopsy was interpreted as being a low grade tumor but the subsequent histology of the local recurrence indicated a Grade III malignancy and the patient died with metastases. Another case was graded II and the patient died with metastases. There are three explanations for this discrepancy: (1) some tumors are malignant in spite of a seemingly low grade histology; (2) low grade and fully malignant areas are present in the same tumor; (3) malignancy may progress in some low grade tumors in the course of time. On the basis of our experience we lean towards the last two possibilities, and therefore recommend histological study of large and multiple sections. Grade III H.E. has a very bad prognosis. The study of H.E. of the bone presents several problems. More information from a larger series of cases is needed to define the value of the histological grading in determining a prognosis, therefore indicating treatment.