The ultrastructural changes produced by iodine-potassium iodide solution on yeast cells of Sporothrix schenckii were investigated by transmission electron microscopy in order to clarify the mechanism of oral potassium iodide therapy for sporotrichosis. Yeast cells were dipped with solutions containing various concentrations of iodine. The rate of germination decreased markedly between the range of iodine concentrations from 0.63 microgram/ml to 5.0 micrograms/ml. No significant ultrastructural changes were seen at the concentration of the iodine of 1.25 microgram/ml (80% germination) or less. In the concentration of 2.5 micrograms/ml (50% germination), normal cells and degenerated cells coexisted. When the cells were treated with 5.0 micrograms of iodine per ml (0% germination) or more, their interior structures were completely destroyed. It is assumed that iodine treatment of the organism causes rapid destruction in the whole cell.