Mechanisms of segregation have been examined in hybrids between Chinese hamster cells, where chromosome loss in comparison to other systems is minimal. Hybrid cells were grown in HAT medium and subjected to back selection with bromodeoxyuridine (BUDR) or azaguanine (AZG). In AZG or BUDR at 30 mug/ml, segregation began with a random high frequency event that gave rise to cells capable of growth in both HAT and back selection medium, unlike the precursor hybrid or original parental cell types. BUDR-resistant segregants were propagated serially in the presence of BUDR, and were examined by clonal analysis for changes in plating properties during long term culture. Over a period of 300 days the HAT/BUDR plating ratio for sergregant cells declined continuously. A parallel decrease was observed in the rate of H3-thymidine incorporation, along with a drop in thymidine kinase activity. These shifts took place only in the presence of BUDR, and could be reversed by altered selection in HAT medium. Clonal studies showed that the evolution of segregant properties occurred in most if not all cells of the population, and did not arise from variation and selection of minority cell types. These properties of the segregating system are not consistent with models based on gene mutation, chromosome rearrangements, or chromosome loss. The evolution of segregants resembles more closely a sorting-out progress, taking place by intracellular selection over many generations. The segregating units may conceivably be cytoplasmic determinants linked functionally to nuclear genes, and which serve to modulate the events of phenotypic expression. Several lines of evidence which bear on this concept are discussed.