Six temporal bone-eustachian tube (ET) specimens with cholesterol granuloma (CG), obtained from 6 children 6 months to 15 years of age, were studied histopathologically to obtain further information about the pathogenesis of CG. We observed CG in the mastoid air cells in 5 ears, the mastoid antrum in 1 ear, the aditus ad antrum in 2 ears, and the epitympanum in 1 ear. All 6 cases exhibited a large amount of remaining mesenchyme that was in continuity with the hematopoietic bone marrow in the locations in which CG was present. All cases demonstrated otitis media with effusion and inflammation of the ET. Apparent morphological abnormalities of the ET and its associated structures, including hypoplastic ET cartilage and an abnormal tensor veli palatini muscle, were noted in 3 of the 6 cases. Furthermore, the posterior cartilaginous portion of the ET that includes its narrowest portion was completely filled with effusion in 2 of the 3 cases with the ET anomaly. The findings obtained were compared with data from age- matched control cases. Our results suggest that the source of erythrocytes in the remaining mesenchyme is the hematopoietic bone marrow. The pathogenesis of CG in children is likely promoted by ET dysfunction resulting in failure of ventilation of the middle ear.