The effect of permanent occlusion on the carotid artery of the rat was studied by light and by electron microscopy. A segment between two ligatures was examined at times from 2 minutes to 1 year. Between 2 and 15 minutes after occlusion, the red blood cells adjacent to the wall formed radially arranged rouleaux; within 24 hours the endothelium disappeared, while platelets (despite the lack of flow) accumulated against the denuded elastica. This behavior of formed blood elements may have been the result of electric forces (injury potential). By 3 days, undifferentiated cells were found lining the elastica interna or free in the lumen; they apparently were derived from medial smooth muscle.In the media, by 3 days some smooth muscle cells had become necrotic, while "undifferentiated" cells appeared; strong circumstantial evidence suggested that these were smooth muscle cells which had lost their specific characteristics and had thus become dedifferentiated (a phenomenon also known to occur in striated muscle cells); by 1 month they had matured into smooth muscle, but the media from then on contained fewer cells and more collagen than normal.In the lumen, the undifferentiated cells also matured into typical smooth muscle cells from 15 days onward, while collagen and elastin appeared between them. After 1 month these cells began to accumulate droplets of fat, which thereafter increased in number (at 6 months they were associated with cholesterol clefts) and then declined. This accumulation of fat in smooth muscle cells (also seen in atherosclerosis) was interesting because it occurred in the absence of blood flow.