The incidence of atypical bronchioloalveolar cell hyperplasia (ABH) of the lung was investigated to evaluate the possibility of this lesion being a precancerous stage in the histogenesis of adneocarcinoma. Lobectomy and pneumonectomy specimens of 165 primary and 45 metastatic tumour cases were step-sectioned horizontally and examined histologically. An average of 51 blocks were taken in each case. Sixty-seven ABHs up to 10 mm in diameter were detected, only 2 lesions being associated with scar tissue. Age was one factor apparently related to ABH development, although not the major one. There was no correlation between smoking index and ABH occurrence. In males, the incidence was highest in association with adenocarcinoma (25.5% of cases, 0.8% of sections), followed by large cell carcinoma (25.0% of cases), squamous cell carcinoma (10.5% of cases) and metastatic tumours from other sites (4.8% of cases). In females, ABH was also more common together with adenocarcinoma (8.3% of cases) than with metastatic tumours (4.0% of cases). The differences in male incidences by case and by section between the adenocarcinoma and metastatic tumour categories were statistically significant (P less than 0.05, P less than 0.01 respectively) indicating that ABH may be a precancerous lesion capable of transformation of adenocarcinoma.