Subcutaneous autografts of ovarian tissue were made in unilaterally ovariectomized adult rats and were examined by light microscopy at various times after implantation. The implants were surrounded by a dense connective tissue capsule. They were well vascularized and contained follicles in varying stages of development as well as in different stages of atresia. Oocytes and fresh corpora lutea indicated that grafts ovulated in the presence of the in situ ovary but that the number of ovulations and their frequency were reduced when compared to normal ovaries or ovaries grafted in bilaterally castrated animals. Ovulation results in the formation of a cyst that contains follicular fluid, the oocyte, and cumulus in the ovarian stroma. Macrophages are associated with the oocyte-cumulus complex but are not prominent in association with the fluid in the cyst. It is suggested that follicular fluid is retained owing to inefficient resorption mechanisms and that this coupled with occasional ovulations results in the formation and maintenance of the large cysts.