We performed a detailed study of swollen neurite aggregation surrounding extracellular neurofibrillary tangles (ghost tangles, GTs) in brains of patients with progressive supranuclear palsy (PSP) by immunohistochemistry and electron microscopy (EM). The complex structures, designated as tangle-associated neuritic clusters (TANCs), were found in the hippocampus and parahippocampal cortex in all five PSP brains examined. TANCs measured from 20 to 40 microm across; twice as large as nearby neurons. Each neurite was globular or fusiform in shape, measured up to 10 microm in diameter, and was found between loosened fascicles of GTs or along their outer rims. There were several subsets of neurites that were argyrophilic or immunoreactive against antibodies to either phosphorylated tau protein, phosphorylated neurofilaments, ubiquitin, or synaptophysin. On EM, TANCs consisted of numerous axon terminals of varying size, which were filled with flocculate dense bodies, vesicular profiles, and synaptic vesicles, as well as normal-looking and degenerating cell organelles. Some axons had 13- to 15-nm-thick straight tubules that showed tau immunoreactivity; however, there was little neurofilament accumulation. Most of the swollen axon terminals conformed to the ultrastructural features of either reactive or degenerating terminals. The neurites identified by immunohistochemistry only represented a minority of the swollen axons visualized by EM. Tubules of GTs were dispersed in the extracellular space, but no amyloid fibrils were found. TANCs may constitute a distinctive form of neuronal degeneration in PSP cortices. We hypothesize that axon terminal accumulation may occur in response to GT-formation.