The ability of cysts of the brine shrimp, Artemia salina, to incorporate 14CO2 into organic compounds soluble in cold-trichloroacetic acid was examined over a broad range of cellular water concentrations. Carbon dioxide was not incorporated by cysts containing less than about 0.3 g H2O/g dried cysts, the "critical hydration" for CO2-fixation. This relationship held whether the cysts were hydrated from the liquid or the vapor phase. The incorporation of radioactivity was shown to be due exclusively to metabolic activity in the cellular component of the cyst. Above the critical hydration, the amount of 14CO2 incorporated was a function of cyst water content, but the kinds of metabolites labelled with this precursor, and their relative proportions, were found to be similar in cysts of greatly different hydration. Almost all of the radioactivity was associated with amino acids, Krebs cycle intermediates and related acids, and pyrimidine nucleotides. The fact that the pathway involved with CO2-fixation, and subsequent metabolism of the fixation products are all initiated in cysts containing as little as 0.3 g H2O/g is particularly noteworthy since this hydration level is well within the range of the amounts of "bound water" described in the literature for a wide array of cells and tissues.