Endocytosis in polyclonally activated, Con A-stimulated spleen cell cultures was analyzed. It was found that as lymphocytes differentiate to acquire cytotoxic capability their endocytic activity also increases, reaching a plateau at 48 hr. Inhibition of sterol synthesis reduced endocytic rates by as much as 50% when 25-hydroxycholesterol was added during the first 24 hr of culture, the time at which sterol synthesis is at its maximum. When 25-hydroxycholesterol was added after the cycle of sterol synthesis, little or no suppression of endocytosis was seen. Compactin, which is an allosteric, competitive inhibitor of HMG-CoA reductase (the rate-limiting enzyme in the sterol biosynthetic pathway), produced a similar abrogation of endocytic rate. The effect of inhibition of sterol synthesis on endocytosis can be counteracted by the addition of cholesterol to the cultures. It is hypothesized that the dynamic process of endocytosis plays a role in the reorganization of membrane components necessary for the expression of the differentiated state of cytotoxicity.