Unfixed, compressed acinar cells of rat pancreas, isolated by mechanical and enzymatic means, were examined by phase microscopy and photomicrographed using 35 mm film and electronic flash illumination. Similarly, observations were made on Walker carcinoma cells; in addition, these cells were treated with solutions containing either phosphatidase A or enzyme inhibitors. Acinar cells contained, besides nuclei, perinuclear droplets and secretion granules, various membranous and vacuolar structures. The basal cytoplasm showed parallel dark lines interpreted as endoplasmic reticulum. In some cells, fragmentation of the reticulum was followed by the direct incorporation of fragments into simple myelin figures. In other cells it appeared that phase-lucent linear structures and vacuoles were derived by dilatation of cisternae of the endoplasmic reticulum. Perinuclear fluid collections arose either by dilation of the perinuclear cisternae of the endoplasmic reticulum or by fluid dilatation of the nuclear envelope. Phosphatidase A disrupted early vacuoles of Walker carcinoma cells. From this and the direct involvement of elements of the endoplasmic reticulum in myelin figures, it was concluded that the membranes limiting the endoplasmic reticulum incorporate phosphatides in continuous layers. While many severely injured cells formed large vacuoles, others developed concentrically laminated myelin figures; it was concluded that both types of structure derived from phosphatides liberated intracellularly, the vacuoles by vesicular myelin figure formation.