The membrane envelope enclosing the bacteroids in soybean root nodules is shown by ultrastructural and biochemical studies to be derived from, and to retain the characteristics of, the host cell plasma membrane. During the early stages of the infection process, which occurs through an invagination, Rhizobium becomes surrounded by the host cell wall and plasma membrane, forming the infection thread. The cell wall of the infection thread is degraded by cellulolytic enzyme(s), leaving behind the enclosed plasma membrane, the membrane envelope. Cellulase activity in young nodules increases two- to threefold as compared to uninfected roots, and this activity is localized in the cell wall matrix of the infection threads. Membrane envelopes were isolated by first preparing bacteroids enclosed in the envelopes on a discontinuous sucrose gradient followed by passage through a hypodermic needle, which released the bacteroids from the membranes. This membrane then sedimented at the interface of 34--45% sucrose (mean density of 1.14 g/cm3). Membranes were characterized by phosphotungstic acid (PTA)-chromic acid staining. ATPase activity, and localization, sensitivity to nonionic detergent Nonidet P-40 (NP-40) and sodium dodecyl sulfate (SDS) gel electrophoresis. These analyses revealed a close similarity between plasma membrane and the membrane envelope. Incorporation of radioactive amino acids into the membrane envelope proteins was sensitive to cycloheximide, suggesting that the biosynthesis of these proteins is primarily under host-cell control. No immunoreactive material to leghemoglobin antibodies was found inside or associated with the isolated bacteroids enclosed in the membrane envelope, and its location is confined to the host cell cytoplasmic matrix.