We describe the microscopic, histochemical, immunohistochemical, and ultrastructural features of hundreds of neuroendocrine tumorlets occurring within a pulmonary lobe severely scarred by intralobar sequestration in a nonsmoking 49-year-old white man. To our knowledge, there have thus far been no descriptions or detailed analyses of neuroendocrine tumorlets arising within a pulmonary sequestration. The neuroendocrine tumorlets appeared in the form of minute aggregates--mostly microscopic, up to a maximum of 0.3 cm in greatest diameter--of small round and short spindle-shaped cells. They were organized in compact nests of fascicles and were supplied with round or elongated euchromatic nuclei and scant weakly eosinophilic cytoplasm. The neuroendocrine tumorlets were clustered around diseased bronchioles or embedded in a fibrotic pulmonary parenchyma with a distinctive infiltrative appearance. Sometimes they lay near an artery channel without an identifiable bronchiole or herniated into distal airways. Most of the neuroendocrine tumorlets were strongly argyrophilic on Grimelius staining. Immunohistochemically, there was reactivity for markers of epithelial and neuroendocrine differentiation together with evidence of orthotopic production of calcitonin, serotonin, and gastrin-releasing peptide and ectopic production of vasoactive intestinal peptide. Ultrastructurally, most of the neuroendocrine cells showed 100- to 120-nm dense-core membrane-bound secretory granules; mucus secretory cells were also present. We prefer the term neuroendocrine tumorlets over the generally used term carcinoid tumorlets, because the nature of these lesions is undefined and the relationship with neuroendocrine pulmonary neoplasms is not yet established.