SUMMARY.-The early changes induced by a carcinogenic nitrosoquinoline compound (NTDQ) have been studied in the subcutaneous tissues of 88 rats. An initial acute inflammatory response is quickly replaced by a distinctive granuloma which is established by 10 days and persists indefinitely-a sequence which takes place both in adult and in newborn animals. Its main components-histiocytes, multinucleate giant cells and granulation tissue-are described in detail and the formation of giant cells by fusion from adjacent histiocytes has been traced. Autoradiographic studies with tritiated thymidine show heavy nuclear labelling in the histiocytes and fibroblasts during the first 10 days; this later declines but raised levels of nuclear labelling persist up to the end of the experiment. No proliferative activity is seen in the giant cells and these cells show only feeble phagocytic activity, tested by their ability to take up carbon particles. The experiments in which colloidal carbon was injected locally also provided some information on the lymphatic vessels in the vicinity of NTDQ-induced granulomata. It appears that, initially, the lesions contain large dilated lymphatic vessels. Later, a dense connective tissue barrier develops and lymphatic connections with the surrounding dermis are progressively reduced.The properties of granulomata induced by NTDQ are discussed and some possible relationships between the formation of granulomata and eventual tumour developed are considered. Particular emphasis is given to two related features: the sustained proliferative activity of the fibroblasts and the resulting semi-isolation of the injection site lesion by the formation of a dense connective tissue barrier.Two previous papers in this series have dealt with the evolution ofsubcutaneous sarcomata in rats injected with one of two carcinogens: a polymerised nitrosoquinoline compound (NTDQ) and iron dextran (Carter, 1969a, b). The stages of sarcoma development are especially well seen in rats injected with NTDQ and it was decided to extend these investigations in several directions; the topics discussed here are concerned with the early reactive changes evoked by this compound. There is increasing evidence that the nature of the initial non-neoplastic changes have considerable bearing on later events with respect to sarcomagenesis (Grasso and Golberg, 1966a, b;Gangolli, Grasso and Golberg, 1967;Carter, 1970) and it is this which prompted the present work. The histological approach, used previously, has been supplemented by electron microscopy, autoradiography, and other techniques in an attempt to gain information on functional as well as morphological changes.