The main problem which has been considered in this paper is the identification of the small thymus cells. Cells resembling ?A infiltrate the cortical layer of the thymus. Whether these cells are true lymph cells, or whether they merely represent a disguised epithelial cell, could not be solved either by purely histological or by histo- and embryogenetic studies. Text-fig. 1 gives a scheme for the differentiation of the small thymus cells and the small lymphocytes, which led to a conception of the lymphoid nature of the small thymus cells. On the left of the figure is shown the origin and the normal differentiation of the small lymphocytes and their mother cells in birds. The source of the lymphoid cells is the loose mesenchyme. The small lymphocytes (S. Lmc.), normally situated in the spleen, in the connective tissue, and in the bone marrow, appear as differentiation products of the lymphoid hemocytoblasts (L. Hbl.), especially when the latter multiply intensely in a limited space, become smaller (S. L. Hbl.), and finally change their morphological structure. The small lymphocytes may themselves under definite conditions undergo further differentiation and develop into plasma cells (Plc.) and into granular lymphocytes (Gr. Lmc.), specific for birds. The mother cells of the small lymphocytes, the lymphoid hemocytoblasts, on the other hand, differentiate in granulopoietic organs (spleen, bone marrow) into granulocytoblasts (Grbl.) and granulocytes (Grc. (Lkc.) ). The histogenetic study of cell ?A shows that its nearest stem cells are represented by the cells ?B and ?C (page 93). The striking similarity in the structure of cell ?A with that of the small lymphocyte (on the left of the text-figure), as well as the analogy of the process of its differentiation, at the expense of cells ?B and ?C, with the normal origin of the small lymphocytes, has led many investigators to accept the mesenchymal origin of the small thymus cells. According to this view, cell ?A becomes a true small lymphocyte. In addition to this is the observation of an invasion of the epithelial thymus anlage by mesenchymal elements. According to the transformation theory cell ?A has become a disguised epithelial cell. The same was admitted for their stem cells ?B and ?C. As mentioned above, many characteristic morphological features of cell structure were shown to be not as essential as previously admitted. Nerve cells and epithelial and connective tissue cells may all assume a spherical shape in a liquid medium. How then are we to regard the small thymus cell ?A ? If the mother cell of the thymus cell ?A is really a lymphoid hemocytoblast, it must possess the differentiation potentialities of a true lymphoid hemocytoblast; it must have the faculty of differentiating not only into small lymphocytes but also into granulocytoblasts (Grbl.'') and further into granulocytes (Grc. (Lkc.)''). If the small thymus cell ?A is a small lymphocyte it must under definite conditions be able to differentiate in the directions characteristic of true small lymphocytes; namely, into plasma cells (Plc.'') and into granular lymphocytes (Gr. Lmc.''). The existence of these possibilities for differentiation of the small thymus cells ?A and their stem cells ?C have been experimentally proved by this study. It has been shown that the mother cell ?C may under certain conditions proliferate intensely and differentiate into granulocytoblasts and granular leukocytes. This is probably due to the stimulating action of certain metabolic products of the grafted spleen cells. It has been also shown that the small thymus cell ?A may differentiate physiologically into a granular lymphocyte, and under administration of x-ray into a plasma cell. All the changes observed on the small thymus cells and their mother cells apply under equal conditions to the lymphoid hemocytoblasts and to the true small lymphocytes in the regions of the organism where these cells are present.