The fine structure of human appendix was studied from the earliest stages of lymphoid development in fetuses to the definitive relationships found in children up to 8 years old. Follicular accumulations of lymphocytes were observed first in the mesenchyme immediately beneath epithelium which contained a predominance of goblet cells on the surface and in the crypts. Larger accumulations of lymphoid cells in older fetuses were intimately related to surface epithelium but not to the epithelium of crypts. At the point of invasion of lymphoid cells into surface epithelium, the goblet cell population diminished and epithelial cells displaying a morphologically distinct form of differentiation were observed. They were characterized by the presence of irregular microvilli or microfolds and numerous apical micropinocytotic vesciles. This follicle-associated epithelium (FAE) appeared ultrastructurally identical with epithelium in chicken bursa of Fabricius, mouse Peyer's patch, and rabbit appendix, which has been shown to be capable of transporting ferritin and India ink tracer from the lumen to underlying tissue. It appeared identical to specialized epithelial cells of adult human Peyer's patches. FAE was maintained through the neonatal period into childhood. We speculate that the biological significance of FAE is to provide a channel through which antigens may stimulate clonal proliferation and seeding of B-lymphocytes throughout the lamina propria of internal mucous surfaces.