We studied the histological and immunological characteristics of graft rejection in the rodent central nervous system (CNS) using embryonic mouse neocortex transplanted into the CNS of neonatal rats. Grafts from animals aged 8-145 days (n = 210) were examined using standard histological techniques for demonstrating cell morphology and fiber projections. Immunohistochemical techniques were used to identify graft projections into the host CNS. The incidence of graft rejection was 18% for animals between 18 and 30 days of age, but increased abruptly to 73% for animals older than 30 days. No graft rejection was seen in animals younger than 18 days. In a smaller group of xenograft recipient rats sacrificed at specific time points before and after one month of age, detailed immunohistochemical studies were performed to correlate the histological appearance of the graft with the level of major histocompatibility complex (MHC) class I and II immunoreactivity, and microglial, astrocytic and lymphocytic staining within the graft and host brain. Evidence of mild rejection as manifested by the appearance of scattered lymphocytes within the graft coincided with the development of Class I and II immunoreactivity within the graft and at the graft-host interface, which was demonstrated in some animals as early as 24 days. At 29 days of age, rejecting grafts showed diffuse MHC expression within the graft and at the graft-host interface; in contrast, unrejected grafts failed to show MHC immunoreactivity. Thirty-four day-old grafts often showed severe rejection with perivascular lymphocytic cuffing within the graft and in host parenchyma remote from the graft associated with increased MHC immunoreactivity within the host brain. In grafts older than 34 days there was frequently a violent rejection reaction with disruption of the cytoarchitecture of the graft and surrounding host tissues, and widespread MHC antigen expression. Immunosuppression with cyclosporin A was effective in avoiding rejection. The high incidence of rejection with neocortical xenografts is in striking contrast to the much lower incidence seen with retinal xenografts. This suggests that there are immunological features unique to neocortex which incite host recognition and rejection.