Early thyroidectomy offers an opportunity of preventing the development of medullary thyroid carcinoma (MTC) in patients at risk for hereditary MTC. We investigated the thyroid glands of 32 patients with hereditary MTC to identify the changes in C-cell morphology and to correlate these with plasma calcitonin (CT) levels and with clinical data. The entire thyroid gland was processed for histological examination including immunostaining for CT. All glands revealed C-cell hyperplasia (CCH), and MTC was found in 21 patients (66% of 32, youngest patient 6 years, youngest with lymph node metastases [LNM] 17 years). The transition from CCH to MTC was characterized by destruction of the follicular basement membrane and by diminished intensity of CT immunostaining. Normal plasma CT levels after provocation with pentagastrin were found only in patients with CCH. Basally elevated plasma CT levels were restricted to MTC. LNM were only found in multifocal tumours at least 4 mm in diameter. It is not yet clear whether or not CCH in patients at risk for hereditary MTC is a neoplastic change, but in these patients the term 'C-cell hyperplasia' is of doubtful value. All MEN gene carriers reveal CCH, and almost all of them will develop multifocal MTC, so that CCH is probably a precursor lesion of an indubitably malignant tumour. Prophylactic thyroidectomy is justified at the age of 6 to anticipate development of a MTC. Lymphadenectomy is necessary in children if they are older than 10 years or have elevated plasma CT levels.