Chronically denervated rat and rabbit tibial nerve distal stumps were studied 3-58 weeks following nerve transection. Schwann cells, macrophages and possibly fibroblasts participated in myelin removal which was largely complete by seven weeks. Degenerating myelinated and unmyelinated fibres developed respectively into circular and flattened columns of Schwann cell processes each delimited by a basal lamina. Schwann cell columns became encircled by fibroblasts and later by cells of perineurial type, underwent shrinkage with time and eventually were replaced by connective tissue. In another experiment, endoneurial tissue was removed from rabbit tibial nerve stumps seven weeks after transection and transplanted between the corneal stroma of the same animal for 2-6 weeks. In this locus, Schwann cells developed a thickened basal lamina and then underwent necrosis. It was concluded that the maintenance of Schwann cells in bands of Büngner is in part dependent on axonal contact and that failure of reinnervation eventually causes the columns of Schwann cells to disappear.