Fine details of the internal and external morphology of the in vitro mycelial phase (MP) to yeastlike phase (YP) transition of the dimorphic fungal pathogen Sporothrix schenckii are shown in electron micrographs of ultrathin sections. Morphological transformation at the ultrastructural level was observed to occur by direct formation of budlike structures at the tips and along the hyphae and by oidial cell formation. Direct budding of yeast from conidiospores was not observed. Early transitional forms arising by direct blastic action from the MP possessed conspicuous electron-dense microfibrillar material at the outer limits of the cell wall. The electron density of this microfibrillar material was enhanced by staining with acidified dialyzed iron. It is believed that this extracellular material may be composed in part of an acid mucosubstance. No acid phosphatase activity was associated with this microfibrillar material. This substance was found to be a characteristic of the outer limits of the cell wall of the YP of S. schenckii. Oidial YP cell formation occurred later during the transition. The cell wall of the developing oidial YP transitional form arose from an inner layer of the converting hyphae. No consupicuous alterations of the cytoplasmic content of the parent MP cell was observed during MP-to-YP transition. It is suggested that the MP-to-YP transition of S. schenckii may be regulated by at least two mechanisms involving alterations of the biochemical and/or biophysical nature of the cell wall of the MP cell in response to the conversional stimuli.