Aims: To Study the histology of the terminal end of distal rectal pouch and fistula region in cases of anorectal malformations (ARMs) and to get an insight on the usefulness of excising or preserving this region during its reconstruction. Materials and Methods: This was a prospective observational study of 20 consecutive cases of ARMs that underwent posterior sagittal anorectoplasty (PSARP) in our hospital over 6 months' period. The histopathological evaluation of the terminal end of the distal rectal pouch and fistula region in all cases with ARM was done. Complicated and redo cases were excluded from this study. Tissue specimen of about 0.5–1.0 cm from the most distal part of the rectal pouch and close to the fistula region was taken. Biopsy specimens were obtained from all patients undergoing a PSARP performed after a defunctioning colostomy or as a primary procedure without colostomy, and histopathological evaluation was done in all cases. Further, the internal sphincter and its morphology, hypoganglionosis or aganglionosis, anal glands and crypts, thickened nerve trunks, and other miscellaneous histopathological aberrations were studied. Based on these histological findings, conclusions were derived whether to preserve or excise this region during ARM reconstruction. Results: Out of the 20 ARM patients included, 12 patients (60%) were male and 8 (40%) were female. An internal sphincter was identified in all the patients. However, the smooth muscle bundles were disorganized in all the 20 patients (100%). While ganglion cells were absent in 90% cases, hypertrophic nerve bundles were a common histological finding (90% of patients). The abnormal mucosal finding was also noted in majority of the patients (75%). Conclusions: An atrophic or disorganized internal sphincter, absent ganglion cells, and abnormal anal mucosal findings in majority of these patients on histology would justify its excision during PSARP. However, further follow-up of these ARM patients in whom the terminal end of the distal rectal pouch and the fistula region is excised or retained is recommended.