Two main classes of morphological change follow trauma to central nerve fibres: (1) axonal disruption leads to total disintegration of the fibre distal (with respect to the cell body) to the lesion; (2) less severe trauma produces focal demyelination with preservation of axonal continuity. Large experimental demyelinating lesions produce complete conduction block. The histologically normal portions of the fibres, proximal and distal to the lesion, retain the ability to transmit impulses. Smaller lesions allow conduction to continue, but at a reduced velocity, and the ability of the fibres to carry long trains of impulses faithfully is impaired. All three defects of conduction contribute to functional loss. After acute transient compression of the spinal cord of the cat, demyelination increases during the first week. Evidence of remyelination appears in the third week. Inappropriately thin myelin is seen surrounding histologically normal axons. By one month, 90% of the fibres in the lesion have acquired new sheaths. Studies on single fibres have shown that the myelin is organized into segments bounded by nodes. The segments are abnormally thin and short. The myelin increases in thickness with time but thin segments are still present at 18 months. Electron microscopy shows that many of the known ultrastructural prerequisites for conduction are present in the new segments. It is not yet known, however, whether the chains of very short internodes which occur on some fibres allow conduction to be restored.