An adaptive increase in tryptophan pyrrolase activity was obtained in the cell-free extracts of Drosophila melanogaster larvae which were given a dietary supplement of L-tryptophan. This activity was detectable in the extracts prepared from larval fatbodies when these were isolated from the remaining body tissues, but the present methods did not reveal any activity in extracts from the latter. These experiments confirm previous observations on the cellular distribution of kynurenine after feeding experiments with tryptophan. The autofluorescence characteristic of kynurenine in the larval fatbody is limited to the cells of the anterior region under normal feeding conditions, but, when larvae are fed tryptophan, autofluorescent kynurenine globules are found in a larger number of fat cells. In vitro incubation of isolated posterior fat cells with tryptophan has shown that these cells are capable of producing kynurenine. It is this same region of the fatbody in the suppressor of vermilion mutant that develops kynurenine autofluorescence, thus indicating that the absence of kynurenine in these cells in the normal strain is the result of an inhibition of their genetic potential to produce kynurenine. It has been concluded that the differentiation of "kynurenine cells" in the fatbody is controlled by a genetic mechanism which operates through the inducible tryptophan pyrrolase system.