If one end of a segment of peripheral nerve is inserted into the brain or spinal cord, neuronal perikarya in the vicinity of the graft tip can be labelled with retrogradely transported tracers applied to the distal end of the graft several weeks later, showing that CNS axons can regenerate into and along such grafts. We have used transmission EM to examine some of the cellular responses that underlie this regenerative phenomenon, particularly its early stages. Segments of autologous peroneal or tibial nerve were inserted vertically into the thalamus of anaesthetized adult albino rats. The distal end of the graft was left beneath the scalp. Between five days and two months later the animals were killed and the brains prepared for ultrastructural study. Semi-thin and thin sections through the graft and surrounding brain were examined at two levels 6-7 mm apart in all animals: close to the tip of the graft in the thalamus (proximal graft) and at the top of the cerebral cortex (distal graft). In another series of animals with similar grafts, horseradish peroxidase was applied to the distal end of the graft 24-48 h before death. Examination by LM of appropriately processed serial coronal sections of the brains from these animals confirmed that up to several hundred neurons were retrogradely labelled in the thalamus, particularly in the thalamic reticular nucleus. Between five and 14 days after grafting, large numbers of tiny (0.05-0.20 microns diameter) nonmyelinated axonal profiles, considered to be axonal sprouts, were observed by EM within the narrow zone of abnormal thalamic parenchyma bordering the graft. The sprouts were much more numerous (commonly in large fascicles), smoother surfaced, and more rounded than nonmyelinated axons further from the graft or in corresponding areas on the contralateral side of animals with implants or in normal animals. At longer post-graft survival times, the number of such axons in the parenchyma around the graft declined. At five days, some axonal sprouts had entered the junctional zone between the brain and the graft. By eight days there were many sprouts in the junctional zone and some had penetrated the proximal graft to lie between its basal lamina-enclosed columns of Schwann cells, macrophages and myelin debris. Within the brain, sprouts were in contact predominantly with other sprouts but also with all types of glial cell.(ABSTRACT TRUNCATED AT 400 WORDS)