Polyol accumulation and myo-inositol depletion were accompanied by extensive vacuole formation in cultured canine lens epithelial cells that were incubated for up to 96 hr in growth medium supplemented with 30 mM D-galactose or 30 mM D-glucose. These changes did not occur in cells incubated in a hypergalactosemic or hyperglycemic medium which also contained an aldose reductase inhibitor (20 microM sorbinil). In addition, these changes were not observed in lens cells incubated in growth medium supplemented with either 30 mM mannitol, which is known to enter cells only slowly, or in 30 mM L-galactose, which is not a substrate for aldose reductase. The vacuoles were visible at the ultrastructural level after 6 hr of incubation in 30 mM D-galactose and increased in both number and size with time. These vacuoles had a unique fine structure. They did not result from swelling of mitochondria or other cell organelles. As demonstrated cytochemically, they did not represent either lysosomes or Golgi saccules. The proliferation pattern of cells incubated with 30 mM D-galactose was clearly different from that of control cells, but approached normal when an aldose reductase inhibitor was added to the incubation medium. Together these findings suggest that vacuole formation and altered cell proliferation were caused by polyol accumulation and/or myo-inositol loss, both of which result from aldose reductase activity.