The extensor digitorum longus muscle of the rat was denervated and transplanted onto the vastus lateralis muscle of the same limb 1 or 2 wk after denervation. The morphological changes appearing after transplantation were examined by light microscopy and EM. Only 3-4 superficial layers of muscle fibers remained unchanged after transplantation. The other parts of the transplanted muscle degenerated nearly entirely during the first 10 days. The myofibrils were removed by macrophages, thus within the tubes of basal lamina no contractile material was observed. In a 2nd period, regeneration of myofilaments took place. After transplantation (6 wk), newly formed muscle was observed, capable of normal function. The diameter of the fibers was smaller and the connective tissue between the fibers markedly increased as compared to the normal muscle of the other side. The importance of the findings for muscle transplantation, especially the relationship between satellite cells and myoblasts, is discussed.