Cell proliferation on the actively growing periosteal surface of the femur of rabbits aged 2 weeks has been investigated using autoradiographic techniques. Injections of tritiated glycine and tritiated thymidine were given simultaneously and the animals sacrificed at intervals from 1 hour to 5 days after injection. The glycine labeled the position of the bone surface at the time of injection and the thymidine labeled the cells which were synthesising DNA. The rate of increase in the cell population was determined by counting the number of cells beyond the glycine label at different times after injection. The cell kinetics of the fibroblast-pre-osteoblast-osteoblast-osteocyte system has been studied. The fibroblasts are relatively unimportant from the point of view of increase in the cell population. The main site of cell proliferation is the layer of pre-osteoblasts on the periosteal surface. The rate of movement of cells from the pre-osteoblast to the osteoblast and osteocyte compartments has been measured. The incorporation of osteoblasts into the bone is not a random process, but it appears that the osteoblast must spend a certain time on the periosteal surface before becoming either an osteocyte or a relatively inactive osteoblast lining an haversian canal. It was estimated that, on an average, an osteoblast produces 2 or 3 times its own volume of matrix during its most active period on the periosteal surface.