The structure and development of the permanent oenocytes of Calpodes ethlius (Lepidoptera, Hesperiidae) are described. There are three sorts of oenocyte. The permanent oenocytes are arranged ventral to the last two pairs of spiracles on abdominal segments 7 and 8 in four clusters of about 45 cells each. The molt cycle oenocytes are ventral to the other spiracles and only enlarge at molting. The subdermal oenocytes differentiate from the epidermis in large numbers shortly before pupation. The permanent oenocytes are large polyploid cells characterized by a cytoplasm of densely packed smooth tubular endoplasmic reticulum, and a plasma membrane invaginated in a meshwork of tubes ending in a reticular layer about 12 micro below the surface. There are two sorts of Golgi complex, one small and of conventional form, the other composed of clouds of microvesicles. 'Dense bodies', believed to belong to the microbody class of organelles, arise directly from the STER. There is a variety of membranous and 'crystalline' inclusions. The formation of isolation membranes from the tubular endoplasmic reticulum, and the origin of isolation bodies and autophagic vacuoles are described. Some autophagy takes place at all times in the molt/intermolt cycle, but there are phases of massive autophagy before the 4th-5th molt and the 5th-pupal molt. These phases coincide with pinocytosis of blood proteins and overlap with or are followed by phases of nuclear replication, RNA synthesis (ribosomes) and ER regeneration. Nuclear blebbing occurs before pupation. The morphology of the oenocytes is most like that of vertebrate cells engaged in steroid hormone synthesis. It is pointed out that the oenocytes rather than the prothoracic glands could be the source of ecdysone and the stimulus for molting.