The ultrastructural changes in red blood cells exposed to phenylhydrazine, either in vivo or in vitro, are described. There is an age-dependent gradient of red cell sensitivity to this drug which includes the more mature reticulocytes as well as the population of circulating erythrocytes. Oxidative denaturation of hemoglobin and the formation of Heinz bodies, which constitute the major drug-induced lesion, are accompanied by a regular sequence of structural changes commencing in the central cytoplasm of erythrocytes and the drug-sensitive reticulocytes. These early changes often appear in close associaion with clusters of mitochondria. The initial morphologic lesion has an apparently crystalline structure and the significance of this stage is discussed. Heinz bodies grow by coalescence and condensation and finally come to lie just beneath the cell surface. Here they result in considerable distortion of cell shape and deformation of the plasma membrane. Thus, phenylhydrazine administration produces in red blood cells extensive ultrastructural alterations both in hemoglobin and in the cell membrane which may have considerable bearing on the fate of these cells in the circulation.