Two adult patients with acquired immune deficiency syndrome (AIDS) presented with psycho-organic symptoms produced by an extensive cerebral and cerebellar leukoencephalopathy. Diffuse loss of myelin and axons with reactive astrocytosis and distinctive multinucleated giant cells were prominent in the deep white matter, but less so in the subcortical white matter and in compact myelinated pathways. Bilateral involvement of the centrum semiovale produced distal Wallerian degeneration of the descending pyramidal tracts, which in one patient correlated with progressive paraparesis and bladder dysfunction. Although there were morphological indications of cytomegalovirus infection and immunohistochemical evidence of papovavirus antigens, the neuropathology did not resemble that usually associated with infection by these opportunistic agents. The possibility is entertained that the progressive diffuse leukoencephalopathy (PDL) in these patients was directly related to infection with human T-cell lymphotropic virus (HTLV-III/LAV), the etiologic agent of AIDS.