Cultured, human, amniotic cells (FL strain) injected into the thigh muscles of cortisone-conditioned mice proliferated to form discrete colonies which, over a period of 5 days, became invested by numerous fibroblasts. Cartilage cells and matrix appeared within the fibroblastic zones during the succeeding 2-4 days. Cartilage matrix calcified within 12 days following FL-cell injection. Cartilage cells closely resembled fibroblasts from which they appeared to be derived, and were readily distinguished from FL cells by their prominent ergastoplasm and Golgi complexes. Cartilage matrix was composed of a distinctive feltwork of randomly arranged, collagen fibrils ( approximately 600 A axial period and approximately 250 A width) from which small electron-opaque, leaflike matrix particles extended. Matrix calcification occurred with the deposition of radially arranged needle-like structures resembling hydroxyapatite. Dense centers were often identified within these clusters. Examination of heavily calcified areas revealed confluent masses of apatite-like material. In general, the fine structure of induced cartilage formation and calcification resembled that of cartilage development and calcification as previously described in the normal epiphysis.