Thirty human lung biopsy specimens have been diagnoses as desquamative interstitial pneumonitis. Six cases had intraalveolar lesions, believed to be early, while 20 had advanced disease characterised by intraalveolar cellular clumps, alveolar wall fibrosis, distortion, and loss of pulmonary parenchyma. Electron microscopy, high resolution light microscopy, and cytological examination have shown that the characteristic clumps in the alveolar air spaces are formed predominantly by enlarged and aggregated macrophages. Lymphocytes and eosinophils are also present in the intraalveolar clumps and in alveolar walls. Inflammation and immunological mechanisms are suggested as causes of the cellular clumping. Interstitial pneumonitis, alveolar wall fibrosis, changes in the alveolar epithelium, and loss of lung parenchyma are believed to be secondary events.