The histologic effects of the intramuscular injection of phenol concentrations ranging from 1% ot 7% were studied in rats and dogs at from one day to ten months after injection. The sites within the muscle localized by a standardized technique for electrical stimulation proved to be intramucular nerves, either near the terminal innervation band, or more proximally, mixed nerves running in the neurovascular bundle in the interfascicular regions of the muscle. The latter was by far the more frequent site of localization. The procedure is therefore identified as "intramuscular neurolysis" rather than motor end-plate or motor point block. Phenol causes nerve destruction with secondary denervation and atrophy, and muscle necrosis, Both nerve and muscle show regeneration which is well established by two months, and almost complete in three months.