Submicroscopic localization of acid phosphatase activity within the senile plaques was studied in two cases of Alzheimer's presenile dementia. The enzymatic activity seen in the plaque seems to be largely localized within the dense bodies in the distended axons and dendrites. The lysosomal nature of these bodies is, therefore, suggested. On the basis of striking morphological and histochemical resemblance of the changes seen in axons and dendrites in senile plaques to those seen in early Wallerian degeneration, formation of the plaque is hypothesized as secondary to a proximal degeneration in the neuronal perikaryon, possibly related to the neurofibrillary tangle of Alzheimer.