Encystation of Giardia lamblia is required for survival outside the host, as well as for initiation of new infections. Previously, we induced cultured G. lamblia trophozoites to encyst in vitro for the first time. During encystation, we observed the appearance of a new class of large secretory vesicle (encystation-specific vesicle; ESV) within which cyst antigens are concentrated and transported to the nascent wall. The present kinetic and physiologic studies now show that ESV are the earliest morphologic change observed in encystation. Expression of ESV, as well as subsequent encystation, are regulated by exposure to bile at the slightly alkaline pH which is typical of the human intestinal tract. ESV formation appears to be less stringently regulated than formation of water-resistant cysts because omission of either encystation stimuli or alkaline pH preferentially inhibits encystation. Since cysts do not attach, we asked when in encystation this physiologic transition occurs. We found that most encysting trophozoites remain attached until they begin to round up (greater than 24 hr). However, if they are made to detach, as early as 12 hr in encystation, well before they round up, they are defective in the ability to reattach. If trophozoites also become less able to reattach to the intestinal epithelium early in encystation in vivo, this would increase their exposure to lumenal encystation stimuli and promote encystation. These studies have provided new insights into the complex sequence of morphologic and physiologic alterations which occur during encystation of G. lamblia in vitro and their regulation by host intestinal factors.