The case is reported of a 10-yr-old girl who developed intractable hematuria from hemorrhagic cystitis following chemotherapy for a malignant lymphoma. Following the intravesical instillation of formalin, which controlled the hematuria, she developed oliguria attributable to ureteric stenosis and fibrotic contraction of the renal pelves. Bilateral nephrostomies were constructed, but recurrent pyelonephritis and further renal pelvic obstruction developed. A series of renal biopsies and ultimately bilateral nephrectomy revealed severe, chronic interstitial nephritis, massive renal interstitial accumulation of deposits probably containing Tamm-Horsfall protein and, in the left nephrectomy specimen, a florid interstitial chronic granulomatous inflammatory reaction. Although ureterohydronephrosis has been described by others as a complication of the intravesical instillation of formalin, fibrotic contraction of the upper urinary tract and the florid interstitial nephritis with granulomata as described herein have not previously been reported. It is proposed that vesicoureteric reflux of formalin, perhaps accompanied by intrarenal reflux, caused or contributed to these pathological changes.