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Neuronal vacuolation and intravacuolar budding of vesicles and cytoplasmic processes appear to be the most characteristic cellular lesion in natural scrapie, a chronic degenerative disease of the central nervous system of sheep which is transmissible by injection. Membrane-bound accumulations of the 35-nm particles are fotnd in the cytoplasmic processes that project inside the vacuoles of the neuronal perikaryon. Such particles are present only in a small number of vacuolated neurons.