Thirty-eight cases of congenital cystic adenomatoid malformation of the lung are described, and a classification based on clinical, gross, and microscopic criteria is proposed. The type I lesion is composed of single or multiple large cysts (more than 2 cm. in diameter), frequently producing mediastinal herniation. The cysts are lined by ciliated psuedostratified columnar epithelium. The walls of the cysts contain prominent smooth muscle and elastic tissue. Mucus producing cells are present in approximatley one-third of the cases, and cartilage in the wall is rarely seen. Relatively normal alveoli may be seen between the cysts. The prognosis is good. Radiographic analysis of the type I lesion can preoperatively suggest the diagnosis, especially with the typical multicystic pattern. The gross appearance of the lesion corresponds closely to the radiographic image and adds another dimension to the pathologist's evaluation of the disease. The type II lesion is composed of multiple small cysts (less than 1 cm. in diameter) lined by ciliated cuboidal to columnar epithelium. Structures resembling respiratory bronchioles and distended alveoli are present between the epithelium lined cysts. Mucous cells and cartilage are not present. Striated muscle fibers may be seen rarely. The type II lesion is associated with a high frequency of other congenital anomalies, and the prognosis is poor. The type III lesion is a large, bulky noncystic lesion producing mediastinal shift. Bronchiole-like structures are lined by ciliated cuboidal epithelium and separated by masses of alveolus-sized structures lined by nonciliated cuboidal epithelium. The prognosis is poor.