Seven cases in which interstitial fibrosis developed in patients who had acute interstitial pneumonia were studied ultrastructurally to elucidate the pathogenesis of the interstitial thickening seen by light microscopy. Interstitial fibrosis is generally thought to result from fibroblast proliferation and collagen deposition, and this mechanism was confirmed. However, two additional mechanisms that also contributed to the interstitial thickening were identified. One, which was not described previously, involves folding of portions of alveolar septa or collapse of entire alveoli and permanent apposition of their walls. This process occurred in areas that had been denuded of alveolar lining epithelium. Granular pneumocytes attempting to re-epithelialize the denuded basal lamina proliferated over the surface of apposed septa, thereby combining the folded or collapsed alveoli and forming a single thickened septum. The second mechanism involves incorporation of intra-alveolar exudates into alveolar septa. It occurred when granular pneumocytes re-epithelialized along the luminal surface of intra-alveolar debris overlying denuded alveolar epithelial basal laminae. The relative importance of each of these mechanisms in the pathogenesis of interstitial fibrosis and their role in the more common chronic interstitial pneumonias are unknown. However, their recognition may inspire new approaches for the prevention and treatment of interstitial fibrosis.