Section of sciatic nerves of rats produced fibrillations within 3 days. Foci of hyalination leading to necrosis corresponded to segments of muscles containing end plates. The electrolyte content, mainly Ca, was increased, NADH2-TR activity was decreased and membrane ATP-ase was increased. The known increase in hydrolytic enzyme activities in denervated muscles was due to spilling of lysosomal enzymes from degenerating axons at the myoneural junction. This explains the discrepancy between morphological studies indicating paucity of lysosomes in normal muscles and the high hydrolytic enzyme activities in denervation. We propose that denervation changes are at least partly due to the effect of lysosomal spillage from degenerating axons.