Examination by immunoperoxidase methods showed that two strumal carcinoids contained thyroxine in the follicular epithelium and colloid. Ultrastructure showed features of thyroid epithelia. Granule-containing cells replaced some follicular epithelial cells at the colloid interface. The morphology of the granules of these cells resembled those of C-cells and foregut-hindgut carcinoids. Transition between thyroid and carcinoid occurred by proliferation of interfollicular cells which subtly formed trabecular structures. Immunoperoxidase for calcitonin was positive both in the interfollicular cells of one tumor and in cells near the transition from thyroid to carcinoid pattern of the other. We conclude that thyroid tissue is a proven component of strumal carcinoid but that follicular epithelial cells may be replaced by granule-containing parafollicular cells. We suggest that the transition from thyroid to carcinoid is accomplished through an intermediate stage of calcitonin-positive cell proliferation. We emphasize, however, that these neoplasms are types of teratomas which may show several forms of differentiation. The tumor of one patient had mid-gut carcinoid elements and represents the first described strumal carcinoid with the carcinoid syndrome.