Sixty-seven young adult white Leghorn chickens were used in a three-step study of the changes following silastic rod preparation of a new tendon sheath and subsequent tendon grafting. In the first experiment the development of the pseudosheath was studied at stated times after silastic rod implantation into the middle toe digital flexor mechanism. In the second experiment, the structural changes were examined at stated times after removing the silastic implant from the toe. In the third experiment, the behavior of the pseudosheath was analyzed at stated times after replacing the silastic rod by tendon graft. The functional return in the toes operated on was assessed and correlated with the histological findings.