Microscopic sections through the articular surfaces of ninety-one tuberculous knee joints were studied. The complete joint was available in each instance. In forty-one and seven-tenths per cent. of the cases subchondral granulation tissue, arising from the margins of the joint, was seen to exist between the cartilage and the bone. Of the specimens in which subchondral granulations were present, there was definite evidence of tuberculosis beneath the margin and center of the cartilage in twenty-nine per cent. Several others were extremely suggestive of tuberculosis but in them definite diagnosis could not be made. Subchondral granulation is probably a tissue reaction to an infectious process, rather than to foreign material in the form of degenerated cartilage. Whether or not it presents the actual cellular characteristics of tuberculosis, it must be considered potentially tuberculous. Subchondral granulation tissue in tuberculosis of the knee joint plays an active part in erosion of bone, demarcation of sequestra, and destruction of cartilage.