In order to better understand the mechanism of sperm individualization during spermatogenesis in Drosophila melanogaster, we have developed an in vitro culture system in which we can perform live observation of individualization in isolated cysts. The whole process of individualization, during which a bundle of 64 syncytial spermatids is separated into individual sperm, takes place in these cultures. Individualization complexes, which consist of 64 cones of actin that assemble around the sperm nuclei, move to the basal end of the tails, forming a characteristic "cystic bulge" that contains an accumulation of cytoplasm, syncytial membrane and vesicles. The cystic bulge is the site of membrane remodeling and its movement was used to follow the progress of individualization. The speed of cystic bulge movement is fairly constant along the length of the cyst. Actin drugs, but not microtubule drugs inhibit cystic bulge movement, suggesting that the movement requires proper actin dynamics but not microtubules. GFP-tagged actin was expressed in the cyst and fluorescence recovery after photobleaching was monitored using confocal microscopy to analyze actin dynamics in cones. Actin turns over throughout the cone, with that at the leading edge of the cones turning over with slightly faster kinetics. Actin does not treadmill from the front to the back of the cone. Actin in moving actin cones turns over in about 12 minutes, although prior to onset of movement, turnover is much slower. Visualization of membrane using FM1-43 reveals that the cystic bulge has an extremely complicated series of membrane invaginations and the transition from syncytial to individualized spermatids occurs at the front of the actin cones. We also suggest that endocytosis and exocytosis might not be important for membrane remodeling. This system should be suitable for analysis of defects in male sterile mutants and for investigating other steps of spermatogenesis.