The structure of the terminal villi was observed in placentae from non-diabetic mothers and mothers with diabetes mellitus using scanning and transmission electron microscopy. The metabolic condition of maternal diabetes was tightly controlled. In the diabetic group, the diameter of the terminal villi was significantly smaller than in the control group. The ramification pattern of villi, classified into hypo-, moderate- and hyper-ramifications, was shown to be mostly moderate in the non-diabetics whereas most of the diabetic placentae had either hypo- or hyper-ramifications. Mothers with a longer duration of diabetes and complicated with retinopathy tended to have hypo-ramification; in these mothers, the weight of the neonates was significantly less than normal. Moreover, in the diabetic placentae, syncytial knots were found more frequently, the percentage of vasculo-syncytial membranes tended to be lower, and the trophoblastic basement membrane was significantly thicker than in the control. These abnormalities in the diabetic placentae were independent of the methods of delivery; they seem to be related with fetal growth retardation and poor neonatal outcome, which are commonly seen in diabetic pregnancy.