We describe nine Spanish-American children from five families with an unusual hereditary lipid storage disease. The family origins were in two small southern Colorado towns. The clinical course varied, but all of the children were found to bruise easily and to have splenomegaly, while most had hepatomegaly. Post-natal jaundice and hepatitis occurred in four. Impairment of vertical gaze and intellectual and neurologic deterioration occurred in most of the patients, with the onset of the disease, usually in childhood. The bone marrow in all patients examined contained both foamy and sea-blue histiocytes. Sphingomyelinase levels in skin fibroblast cultures were greatly decreased in seven of the eight cases evaluated. It is believed that these patients have a sphingomyelin lipidosis and represent a variant of the Niemann-Pick disease. Clinical and enzymatic findings are compared with those of other cases in the literature.