Abstract.Election microscopic observation of samples of tissues from lesions diagnosed as focal epithelial hyperplasia revealed the presence of viral particles in six (possibly seven) of 13 cases examined. Viral particles were intranuclear and varied from sparsely scattered to densely packed. A crystalline arrangement was present in one case. The chromatin of affected cells was typically condensed into clumps and thick bands, and the nuclear membrane was usually absent in pronounced cases. The nuclei of the basal and prickle cells were frequently indented and the chromatin peripherally condensed. Numbers of lysosomal‐like organelles were observed in many of these cells. The ballooning epithelial cells with their mitosis‐like aberrations observed with light microscopy consisted of a rim of tonofilmaments and organelles and a homogeneous granular center interspersed with dense areas. It is suggested that the nuclear characteristics and numerous lysosomes observed in basal and prickle cells are cellular changes induced by the viral infection and that the mitosis‐like aberrations represent a bizarre and arrested form of mi