Acetyltransferase enzymatic activity was detected and measured in homogenates obtained from intact nerve fibers and their saparate cellular components, in the tropical squid Sepioteuthis sepioidea. The levels of acetylcholine synthesis were determined in pooled samples of whole stellar nerve, intact giant nerve fiber, extruded axoplasm, axoplasm-free giant nerve fiber sheaths, and small nerve fibers. The values found per mg of protein for the axoplasm-free sheaths are about 3-9 times those of the extruded axoplasm, and comparable to those found for the intact giant nerve fiber. These experimental findings settle the question of whether the Schwann cells of the giant nerve fiber of S. sepiodea, under physiological conditions, contain acetyltransferase activity and are able to synthesize acetylcholine.