The effect of engulfment by hamster macrophages, and of temperature, on the transformation of Leishmania donovani was investigated using NNN-cultured leptomonads, and hamster-spleen-derived Leishman-Donovan bodies. Intracellular localization of the parasities promoted transformation from leptomonad to Leishman-Donovan bodies, whereas extracellular localization promoted the reverse transformation. Temperature appeared to be a selective, rather than an inductive, factor in the transformation process. The development and maintenance of the parasite in the Leishman-Donovan body stage depended upon an intracellular localization, and upon the integrity of the macrophage, rather than the temperature of incubation.