Molgula manhattensis was shown to respond to glass fragments and tunicate grafts implanted within the wall of the branchial sac with a number of cellular mechanisms. Glass fragments inserted into branchial sac tissue were encapsulated by hemocytes. Vanadocytes, or cells derived from vanadocytes, were the blood cells most active in encapsulation mechanisms. Portions of the capsules were composed of: (1.) multilayered structures made up of vanadocytes, (2.) monolayers of cells derived from vanadocyte aggregates, (3.) strands of tunicin produced by vanadocytes. Injected carmine and trypan blue were ingested by phagocytes of several types. Trypan blue was transferred from the blood phagocytes to epithelial cells of the branchial sac, from which it was eliminated from the animal. Although acceptance of autografts and allografts was not observed, a marked cellular response to the grafts occurred. This response was characterized by massive infiltration of the graft by vanadocytes.