The earliest stages of acne keloidalis are not well characterized. In the present study, transverse sections of the early lesions revealed follicular units in several stages of inflammation. These follicles surrounded the central follicular units that gave rise to the clinically evident papule. Despite a spectrum of inflammatory changes, the most marked inflammation consistently occurred in the deep infundibular and isthmian levels of the hair follicles. Two follicles, presumably in the earliest stage, exhibited primarily an acute folliculitis and perifolliculitis, with destruction of the follicular wall and the release of hair. Central follicles showed predominantly acute neutrophilic or chronic lymphocytic inflammation at the upper isthmian levels and granulomatous inflammation at the deeper isthmian levels. Other follicles showed scar at the isthmian levels trapping hair fragments in the inferior portion of the follicle, with granulomatous inflammation and scarring. Sebaceous glands were absent in all stages of folliculitis in seven of eight follicular units.