To study the distribution of myelin-associated glycoprotein (MAG) in human nervous tissue and in multiple sclerosis (MS) lesions, we used paraffin sections and our modification of the peroxidase-antiperoxidase technique. Sections of MS lesions also were treated with antiserum to basic protein (BP) and with histological stains for axons and myelin sheaths. In tissue from normal developing central nervous system, oligodendroglia, their processes, and wwly formed myelin sheaths were intensely stained by MAG antiserum. In adults, MAG was found in periaxonal regions of myelinated fibers of the central and peripheral nervous system. The most striking finding in MS lesions was the extension of decreased MAG immunostaining into white matter that appeared normal when treated with BP antiserum or luxol fast blue. In acute early MS lesions the decrease in MAG immunostaining extended far beyond the margin of acute demyelination, where the BP staining of degenerating sheaths often was increased. In chronic inactive plaques, this decrease in periaxonal MAG immunostaining was limited to relatively few fibers in a thin rim around each lesion. These observations suggest that in MS, immunoreactivity of periaxonal MAG is altered before myelin breakdown begins. Early in degeneration, myelin sheaths and their fragments often were more intensely stained by BP antiserum than normal sheaths; later the staining intensity decreased. In shadow plaques, BP antiserum stained some oligodendroglia. Their appearance and location among thinly myelinated axons suggested that these oligondendroglia were forming new sheaths around previously demyelinated axons.