A study was made to determine the causative lesion of Marek's disease virus (MDV)-induced transient paralysis (TP) in chickens by comparing the ultrastructure of brain tissue from MDV-infected genetically susceptible and resistant birds. There were numerous intramyelinic vacuoles in the brains of TP-affected birds. Many of these vacuoles contained particulate material compatible with precipitated protein from edema. Astrocyte processes often were distended with similar particulate material. Most intramyelinic vacuoles were either adjacent to the axolemma or within inner myelin lamellae. Myelin sheaths of affected axons, while being displaced, were relatively normal with no vesiculation. Most affected axons were also otherwise normal. Cell processes adjacent to occasional affected axons were distended by degenerating mitochondria, vacuoles, and amorphous material. Some of these processes appeared to be inner loops of oligodendrocyte cytoplasm. The cell bodies of most oligodendrocytes were normal, but a few contained vacuoles similar to those seen in processes adjacent to axons. There were scattered necrotic cells. While most of these could not be specifically identified, some appeared to be oligodendrocytes. Mononuclear inflammatory cells were present both perivascularly and within the parenchyma. Although these cells occasionally contacted myelinated axons and there was myelin phagocytosis, there was no indication that they initiated demyelination. Brain tissue from virus-inoculated resistant birds had perivascular aggregates of mononuclear cells, but there were no intramyelinic vacuoles and few necrotic cells. These findings suggest that intramyelinic vacuolation contributes to the pathogenesis of transient paralysis. Potential pathophysiological mechanisms contributing to the vacuoles, including brain edema and oligodendrocyte injury, are discussed.