In sequence with an earlier publication on the results of heterograft tracheal transplants in animals, changes in the Formol-Cialit preserved heterogenous tracheal grafts were studied by light microscopy, and by scanning and transmission electron microscopy. Two main queries arise. Where does the graft respiratory epithelium come from, and what happens to the grafted tracheal cartilage? We found that in the epithelium of graft the number of ciliated cells decreased and that there was ultrastructure evidence of cilial destruction, the goblet cells increased in number, there was a loss of strict polarity of the respiratory epithelium, subepithelial accumulations of cells of probable epithelial origin appeared, and there was a subepithelial accumulation of lymphocytes just beneath the basal lamina. Resorption and transformation of the grafted tracheal cartilage into connective tissue was also observed. Hence, the following conclusions may be made. (1) Small tracheal defects can be corrected by Formol-Cialit preserved heterologous grafts. (2) The mucosa of the host trachea produces a functioning respiratory epithelium in the graft. (3) Tracheal grafts should not exceed 2 x 3 cm in size otherwise a new stenosis from resorption and transformation of grafted cartilage into connective tissue will occur.