Symptoms of phloem necrosis in the secondary phloem of elms (U. americana) were studied using light- and EM. The 1st symptom, abnormally rapid deposition of callose within sieve tubes, was followed by collapse of sieve elements and companion cells. Hyperactivity of the cambium followed, resulting in formation of replacement phloem. Sieve elements in replacement phloem, which were smaller than normal, soon became necrotic. Starch accumulated in diseased, but not in healthy phloem. Mycoplasmalike organisms, seen only in mature sieve elements, were erratically distributed within the symptomatic phloem. Histological aberration in secondary phloem was correlated with intensity of discoloration of the tissue. Normal sieve tube necrosis, observed in tissue of healthy elms collected in Nov., proceeded more slowly than that seen in degenrating phloem of diseased trees. During the winter, all sieve tubes in stems of both healthy and diseased trees were either occluded with callose or crushed. In roots, samples of secondary phloem collected in Jan. from diseased and healthy trees showed some sieve elements that had not degenerated. The pathogen probably overwinters within these cells.