Histological and electron microscopic observations, together with virus cultures, were made in the eyes of 50 New Zealand white rabbits which received bilateral intrastromal inoculation with the RE strain of herpes simplex virus. Virus cultures of whole corneas were positive for the first 2 weeks following inoculation, but were consisently negative thereafter. An inflammatory response to HSV infection, consisting of polymorphonuclear leukocytes and lymphocytes, was seen in the limbus within 7 hours after inoculation of the cornea. A massive accumulation of lymphocytes and plasma cells appeared in the limbus, suggesting that the limbus may behave as a lymphoid tissue, where differentiation and maturation of lymphoid cells occur as they acquire immunocompetence. Neovascularization of the cornea was associated with a heavy infiltration of the surrounding stroma with polymorphonuclear leukocytes, as well as numerous plasma cells and a few lymphocytes and macrophages. Numerous abnormal, pleomorphic keratocytes were found in the stroma. Lymphocytes were frequently found closely adhering to these abnormal keratocytes, suggesting a T-cell attack on a target cell. A model which describes the mechanism by which herpes virus infection leads to corneal scarring is suggested.