In 42 human sural nerve biopsies degeneration of endoneurial cells was evaluated semiquantitatively at the electronmicroscopic level. These cells were of non-Schwannian origin since they were not surrounded by a basement membrane. Most of the degenerating cells resembled endoneurial fibroblasts: their remaining cytoplasmic processes were quite extensive, not finger-like as in macrophages, and their cytoplasm did not contain conspicuous lysosomes or phagolysosomes that would identify them as degenerating macrophages. Criteria for regarding these cells as degenerating were defects of the cytoplasmic surface membrane with extracellularly situated organelles. The ratio between normal and degenerating endoneurial cells in five different groups of peripheral neuropathies was compared to a group of normal controls. No degenerating endoneurial cells were found in the latter. The largest proportion of degenerating endoneurial cells was noted in patients with panarteritis nodosa (30% of the endoneurial cells evaluated). Between 9% and 18% of the evaluated endoneurial cells were seen degenerating in hereditary motor and sensory neuropathies, in neuropathies associated with IgG or IgM gammopathy, and in chronic demyelinating inflammatory polyradiculoneuropathy. These findings suggest that degeneration of endoneurial cells is a nonspecific sign of peripheral neuropathy occurring in various types of neuropathy, although vasculitis represents the most frequent cause. Thus, degeneration of endoneurial cells can be added to the growing list of changes that possibly indicate an inflammatory disorder, even during the intervening stage when apparent inflammatory cell infiltrates are lacking.