The light and electron microscopic changes in biopsy tissue from the lung of a 30-year-old housewife severeley incapacitated by diffuse pulmonary sarcoidosis with pulmonary hypertension are presented. The lung tissue was distorted by numerous granulomas in the interstitial tissues and within alveoli. Many pulmonary blood vessels including arteries were damaged by the granulomas. The ultrastructural features of the epithelioid cells were found to be distinctive and probably specific. The giant cells which accompanied the epithelioid cells contained two types of inclusion body: one appeared to be related to the Schaumann body but the nature and origin of the second type was not clear. Many of the granulomas were surrounded by avascular fibrous tissue which contained, in addition to mature fibroblasts, myofibroblasts and a primitive form of cell that appeared to be a fibroblast precursor. It was conjectured that the myofibroblasts, through their contractile powers, might increase the distortion of the lung architecture and thereby the patient's disability. The alveolar walls were thickened by a diffuse infiltrate of macrophages and epithelioid cells but there was no excess of collagen and elastic fibres. The evidence suggested that the epithelioid cells developed from macrophages. From the cellular nature of the diffuse infiltration of the alveolar walls and the absence of fibrosis it seemed that the disease was still at an early and active stage, a conclusion strengthened by the fact that treatment with corticosteroids led to marked and sustained clinical improvement.