The route of fluid transport across the wall of the rabbit gall bladder has been examined by combined physiological and morphological techniques. Fluid transport was either made maximal or was inhibited by one of six physiological methods (metabolic inhibition with cyanide-iodoacetate, addition of ouabain, application of adverse osmotic gradients, low temperature, replacement of Cl by SO(4), or replacement of NaCl by sucrose). Then the organ was rapidly fixed and subsequently embedded, sectioned, and examined by light and electron microscopy. The structure of the gall bladder is presented with the aid of electron micrographs, and changes in structure are described and quantitated. The most significant morphological feature seems to be long, narrow, complex channels between adjacent epithelial cells; these spaces are closed by tight junctions at the luminal surface of the epithelium but are open at the basal surface. They are dilated when maximal fluid transport occurs, but are collapsed under all the conditions which inhibit transport. Additional observations and experiments make it possible to conclude that this dilation is the result of fluid transport through the spaces. Evidently NaCl is constantly pumped from the epithelial cells into the spaces, making them hypertonic, so that water follows osmotically. It is suggested that these spaces may represent a "standing-gradient flow system," in which osmotic equilibration takes place progressively along the length of a long channel.