The cellular localization of enzymes in Diplococcus pneumoniae was examined by fractionation of spheroplasts. A deoxyribonuclease implicated in the entry of deoxyribonucleic acid (DNA) into the cell during genetic transformation was located in the cell membrane. This enzyme, the major endonuclease of the cell (endonuclease I), which is necessary for the conversion of donor DNA to single strands inside the cell and oligonucleotides outside, thus could act at the cell surface. Another enzyme, the cell wall lysin (autolysin), was also found in the membrane fraction. Other enzymes, including amylomaltase, two exonucleases, and adenosine triphosphate-dependent deoxyribonuclease, and a restriction type endonuclease, were located in the cytosol within the cell. None of the enzymes examined were predominantly periplasmic in location. Spheroplasts were obtained spontaneously on incubation of pneumococcal cells in concentrated sugar solutions. The autolytic enzyme appears to be involved in this process. Cells that were physiologically competent to take up DNA formed osmotically sensitive spheroplasts two to three times faster than cells that were not in the competent state. Although some genetically incompetent mutants also formed spheroplasts more slowly, other such mutants formed them at the faster rate.