Approximately 8000 cigarette-smoking men over the age of 45 have entered into a lung cancer detection program in New York City. Cytologic examinations of sputum were carried out on 4000 subjects and lung cancer was found by this technique in nine men with normal chest x-rays. Seven had in situ or incipient invasive epidermoid carcinoma confined to the bronchus. These seven cases were studied by detailed histologic examinations of the bronchial tree in the resected specimens through sixth generation subsegmental bronchi. It was concluded that: 1) invasive epidermoid carcinoma arises from carcinoma in situ of bronchial surface epithelium or an extension of that neoplastic epithelium in bronchial glands; 2) the site of origin is a segmental bronchus in most instances; and 3) each carcinoma should be considered as unifocal in origin even though there is a continuing risk of another primary lung cancer. It seems unlikely that squamous metaplasia or basal hyperplasia is an essential step in carcinogenesis; rather, we believe that carcinoma may arise in bronchial epithelium without regard to the presence or absence of basal hyperplasia or squamous metaplasia, which should be considered nonspecific reactions to injury that may or may not accompany carcinogenesis.