A group of 12 children with acquired cholesteatoma had the ventilatory function of the Eustachian tube assessed by the inflation-deflation technique. All had varying degrees of functional rather than mechanical obstruction of the Eustachian tube. In these children, the pathogenesis of acquired cholesteatoma appeared to be the result of the following sequence of events: functional Eustachian tube obstruction, high negative middle ear pressure, atelectasis of the tympanic membrane-middle ear, a retraction pocket in either the posterosuperior or attic portion of the tympanic membrane, and adhesive otitis media. Tympanoplasty in these children was not successful. It is suggested that when the middle ear-mastoidectomy cavity is allowed to remain open, then the bony portion of the Eustachian tube should be surgically closed to prevent postoperative reflux of nasopharyngeal secretions.