The degenerative and early regenerative events following mincing and autotransplantation of rat skeletal muscle were examined at the ultrastructural level. During the first eight hours after injury, myonuclei undergo pyknosis, mitochondria become enlarged and vesiculated, myofilaments appear less distinct than normal and the sarcolemmata either disappear or become extensively fragmented. Further degeneration of the myofibers progresses slowly until macrophages and polymorphonuclear neutrophils invade the degenerating sarcoplasm between one to four days after mincing. Scattered throughout the minced muscle implant during the first 24 hours after injury are small, viable-appearing, undifferentiated cells located between the external lamina and degenerating sarcoplasm. Such cells, which are structurally similar to satellite cells seen in uninjured muscle, are believed to be regenerating presumptive myoblasts due to their mesenchymal-like morphology and sublaminar position. External laminae of the injured muscle fibers do not undergo immediate degenerative changes, but rather persist during the first three to six days as laminar tubes within which spindle-shaped myoblasts and newly formed myotubes are frequently observed. Examples of regenerating myoblasts in the process of budding-off from damaged muscle fibers were not observed in this study. Therefore, the evidence suggests that satellite cells are the major source of regenerating myoblasts in skeletal muscle of the rat.