The cochlear nuclei of homozygous Gunn rats aged 2 days to 7 months were examined. Ultrastructural abnormalities were observed in all age groups studied, including 2 and 4 days old animals. Mitochondrial alterations are amont the earliest manifestations of bilirubin encephalopathy (2 days). In mitochondria of large neurons, vacuoles were found which contained increasing (with age) collections of alpha and beta glycogen particles. Some of the larger 'ex-mitochondrial sacs' appear to have been caught at the point of disruption, with glycogen-filled vacuoles in close proximity. Dilated profiles of rough ER also contained glycogen particles. In the cytoplasm of the same large neurons, elaborate myelin figures surrounded tongues of cytoplasm, vacuoles and degenerative elements. Reconsideration of previous morphological and biochemical observations in the light of the present findings makes it appear very likely that bilirubin primarily affects membrane function, especially in mitochondria.