In a series of 756 glutaraldehyde-stabilized umbilical vein grafts implanted over a 7 1/2-year period, aneurysms were identified in seven cases. The earliest aneurysm was seen at 31 months after implantation and the remainder between 43 and 79 months after surgery. Corrective surgery was performed in five cases and succeeded in four. Although definite mechanisms have not been identified, mechanical fatigue, reversal of aldehyde crosslinks, and immunologic factors may be operative. The pathologic changes include: (1) actual dilation of both graft and mesh with or without intraluminal thrombus and, (2) maintenance of graft diameter with erosion of the umbilical vein and polyester mesh rupture leading to perigraft hematoma and false aneurysm formation. Microscopic examination and infrared spectral analysis confirmed the presence of host-contributed lipid in some specimens. Although this is a low incidence of aneurysm formation, umbilical vein grafts should be selected primarily for patients with limited life expectancy or for whom alternative materials with comparable or superior patency rates are not available or acceptable. Periodic angiography, particularly after 3 or 4 years, is recommended as a routine part of follow-up examinations. Improved graft materials and control of host environmental factors are potential means to reduce the noted degradation.