The behavior of cartilage transplants and the cellular reaction in the surrounding connective tissue have been studied in rabbits. Costal cartilage was used as a control. Histochemical methods, together with freezing-drying fixation, were used to visualize some tissue components of interest. These included the carbohydrate-protein complexes of the ground substance, inorganic phosphate-carbonate, and intracellular glycogen. Dissolution of the mucoprotein ground substance was observed on the periphery of autografts sixty days after implantation and of costal cartilage of comparable age. In boiled autocartilage implants, a more general and extensive dissolution occurred and this began much earlier. In these instances the changes in the matrix were accompanied by deposition of phosphate-carbonate, presumably as the calcium salt. In vitro experiments in which a bacterial collagenase was used resulted in striking disintegration of boiled cartilage and somewhat lesser changes in non-boiled autocartilage grafts and costal cartilage. In a like manner enzymatic activity by connective-tissue cells could lead to changes in the matrix of implants. The fate of cartilage implants appears to be determined by their inherent physicochemical characteristics and by the connective-tissue reaction which is provoked in the host. Cells of the boiled cartilage implants lost their glycogen early and resynthesis was impossible. In the autografts, evidence for sustained metabolic activity comparable with that in costal cartilage was deduced from the continued presence of intracellular glycogen.