Differentiation of ameloblasts is characterised by the development of cytoplasmic organelles and changes in the distal cytoplasm and surface adjacent to the basal lamina. Examination of rat tooth germs prepared for thin section electron microscopy and for freeze fracture, and also stained for acid phosphatase, reveals that three concomitant events occur in this region. The distal surface membrane becomes progressively more undulated, there is an increase in acid phosphatase-containing membrane-bound vesicles (lysosomes) and the basal lamina becomes less apparent and finally disappears. Since the progressive disappearance of the basal lamina is accompanied by an increase in lysosomes, it is possible that lysosomal enzymes are involved in the breakdown of the basal lamina or, alternatively, that the basal lamina is broken down by enzymes derived from odontoblasts, and that its remnants are taken up by the many coated pits and invaginations of the distal surface membrane to be further degraded iun the lysosomal system.