Two giant-cell tumors of tendon sheath were studied by electron microscopy. The cytology of these lesions supports the current interpretation that they are hyperplastic lesions of synovial origin. The topographic interrelations of the cell types, the specializations of cell surfaces, and the presence of intermediate forms indicate that all the cells of the lesion are, or are derived from, cells present in normal synovial membranes. The basic cells found in these tumors include macrophage-like and fibroblast-like cells, both of which occur in normal synovial membranes. The giant cells seem to form by fusion of the macrophage-like cells, and the foam cells from lipid accumulation within fibroblast-like, and perhaps macrophage-like, cells.