A virus isolated from a natural outbreak of canarypox was replicated on the chorioallantoic membranes of chicken embryos, and its ultrastructure and development were observed. Electron microscopy of thin sections of pocks produced on the chorioallantoic membranes revealed a variety of developmental forms which appear similar to those demonstrated in studies of vaccinia, ie, viroplasm or viral factories; immature, undifferentiated virions partially enclosed by membranes; completely enclosed nondifferentiated spherical or oval virions; immature virions with discrete nucleoids; and the more compact brick-shaped mature virions. Two types of A-type inclusions were noted: those with virions around the periphery, and those filled with virus particles. The appearance of mature viruses within the inclusion bodies and different stages of viruses outside the inclusion indicate that in a course of development, maturing poxvirus may enter the inclusion bodies as they acquire surface tubules on their envelopes. Mature virions also were seen budding out of the cell membrane, apparently enveloped in a portion of the membrane. Studies showing the entrance of poxvirus into inclusion bodies have not been reported. In this report, electron micrographs are shown of viruses entering inclusion bodies.