The differentiation of DMBA-induced rhabdomyoblastomas was studied during the early stages of tumour growth. Two cell populations were found to constitute the tumour tissue: small cells (SC) and long spindle-shaped cells (LSSC). The SC were the only tumor cells at the earliest detectable stage of tumour growth 10 weeks after intramuscular injection of DMBA. They had small heterochromatic nuclei with a compact nucleolus containing only fibrillar components. The cytoplasm was very rich in SER of tubular type, dense bodies and Golgi apparatus. Centrioles at all stages of the replicative cycle were very frequently observed. The cells did not fuse and showed no tendency to differentiate. The LSSC had large euchromatic nuclei with multiple irregular nucleoli containing both fibrillar and granular components. The cytoplasm had an abundant GER and well-developed Golgi apparatus. These cells formed 100 Angstrom thick cytofilaments the increase of which paralleled reduction of GER. The cells tended to fuse but did not form myofibrils. A rare variant of these cells neither possessed Golgi apparatus nor formed cytofilaments but accumulated dense protein substance in the cisternae of the GER. Myotubes with cross-striated myofibrils were but occasionally observed. The ultrastructural characteristics of both cell types revealed essential differences in the biosynthetic activity and the degree of differentiation. The SC were considered to belong to the myogenic cell line and to be most probably the malignant counterpart of proliferating satellite cells (presumptive myoblasts) and precursors of the LSSC. Morphologically and developmentally the LSSC bore close resemblance to normal myoblasts but the proliferative capacity of some of them seemed to be lost. The differentiation of the malignant myoblasts in the DMBA-induced rhabdomyoblastomas was similar to the early differentiation of the normal muscle tissue.