Atypical adenomatous hyperplasia (AAH) of the lung could be a good material to understand the histogenesis of peripherally occurring, well-differentiated adenocarcinoma. However, its true biological significance remains to be clarified. The authors present the histomorphological studies of this lesion and compare the ultrastructure with that of nonmucinous bronchioloalveolar carcinoma (BAC) to define characteristic features of AAH. Light microscopy showed the well-preserved pulmonary architecture, proliferated neoplastic cells without marked cellular atypia, and no transitional area to obvious adenocarcinoma. Intranuclear inclusion was present in a large number of neoplastic cells. Electron microscopy revealed that cuboidal or low columnar neoplastic cells proliferated actively but were not crowded on slightly thickened fibrous alveolar septa with both Clara-like granules and small lamellar bodies in the cytoplasm resembling that of Clara cell and type 2 pneumocyte. Some of the nuclei had characteristic invaginations of its nuclear membrane. Although the findings appear to be nonspecific for AAH, the authors emphasize that AAH is an alveolar intraepithelial neoplasia that represents a very early stage in the continuous developmental spectrum of adenomatous neoplasia in the bronchioloalveolar region corresponding to dysplasia or intraepithelial neoplasia in other organs, and will give the significance to speculate its histogenesis.