Paecilomyces lilacinus was cultured from an ulcerated corneal transplant, sections of which, following surgical removal, revealed dense mycelial growth throughout the corneal remnant and penetrating Descemet's membrane. PAS-stained sections showed, in addition to the hyphae, numerous small, ovoid elements consistent with conidia of P. lilacinus. Infection apparently had spread to the transplant from the recipient's cornea. The fungal isolate proved resistant, in vitro, to amphotericin B, 5-fluorocytosine, and pimaricin, but sensitive to ketoconazole and moderately sensitive to miconazole. Following a second transplant and intensive antifungal therapy, the infection appears to have been eliminated.