In 1901 two of us published a paper on Nerve Degeneration, a subject which it is almost impossible to study without taking into account the closely-related subject of nerve regeneration. From the microscopic study of the distal portions of divided nerve trunks we arrived at the conclusion that the activity of the neurilemmal cells has some relation to the development of the new nerve-fibres. At an early stage in degeneration they multiply; later they participate with phagocytes in the removal of the broken-up myelin droplets; subsequently they elongate, and, becoming connected end to end, lead to the formation of what some term embryonic nerve-fibres. These three stages are illustrated by some of the microphotographs published in the paper alluded to.(See especially figs. 22, 25, and 27.) We were, however, extremely doubtful whether this appearance really indicated the formation of real nerve-fibres capable of conducting impulses, and felt that such incomplete observations could not be considered as serious objections to the view of those who, from Waller onwards, have taught that the axis cylinder is the branch of a nerve-cell which grows towards the periphery.