Human fibroblast cell cultures inoculated with microsporidia-infected corneal scrapings from an AIDS patient were fixed in situ and examined by scanning and transmission electron microscopy. The parasite grew prolifically and all developmental stages were observed. Meronts underwent binary fission and the daughter cells transformed into elongate, chain-like sporonts that eventually separated into sporoblasts. The formation of components of the mature spores is described. The parasite, a species of Encephalitozoon, underwent development both in the cytoplasm and within a parasitophorous vacuole, distinguishing it from the morphologically similar species E. cuniculi and E. hellem, both of which have been described from lesions in the human eye and have been reported to develop exclusively within a parasitophorous vacuole.