The clinical course and histopathological findings in 17 cases of congenital corneal opacity treated by penetrating keratoplasty are described. On the basis of the histopathological findings 9 of the cases of corneal opacity were diagnosed as Peter's anomaly, 5 cases as sclerocornea or mesenchymal dysgenesis, 2 as choristoma, and 1 case as leukoma. Only 2 of the corneal grafts performed in these infants remained clear. The underlying disease in the 2 cases where surgery was successful was Peter's anomaly, with a clear corneal periphery. From the analysis of the corneal buttons the authors deduce that graft failure in most such cases is due to severe structural changes of the host cornea. Three findings represented consistently unfavorable signs: (1) absence of Bowman's layer; (2) absence of Descemet's membrane and (3) corneal vascularization at the cut edge of the button. Immunoreaction or infection of the graft are rare causes of graft failure. Despite the extremely poor prognosis of bilateral congenital corneal opacities, penetrating keratoplasty should be attempted. The histopathological findings may be used as prognostic criteria for graft survival or the extent of anterior segment dysgenesis.