The hypothesis that gastric ulcer develops in pre-existing areas of atrophic gastritis was subjected to experimental scrutiny. A full thickness wedge of vascularized canine gastric corpus was explanted onto the anterior abdominal wall. Thus exposed, the mucosa developed inflammatory cell infiltration, necrosis, and sloughing. Later, new gland formation by undifferentiated mucus-containing cells occurred. After 6 to 8 weeks the mucosa was reconstituted but contained no parietal or chief cells, secreted no acid in response to histamine stimulation, and histologically resembled human atrophic gastritis. Eight explants returned to the corpus of the stomach at this time retained an atrophic appearance at the time of killing 19 to 21 days later. In 10 dogs, return of the wedge to the stomach was followed by 14 daily injections of histamine suspended in beeswax. Eight of these 10 animals developed penetrating ulcers in the atrophic reimplanted mucosa. No ulcers occurred in eight full thickness wedges which were histologically normal, having been reimplanted into the stomach immediately following construction and subjected to gastric hypersecretion induced by histamine. Blood flow to the atrophic reimplanted mucosa was not significantly different from flow to histologically normal re-implanted mucosa or from intact corpus mucosa. These results suggest that the presence of atrophic gastritis renders stomach mucosa susceptible to acid peptic digestion and ulcer formation.