When cultured in suspension, epithelial thyroid cells organized into inside-out follicles. We studied the behavior of these structures after seeding on polystyrene, type I collagen, and reconstituted basement membrane (RBM) gel. When seeded on plastic, type I collagen or mixed type I collagen-RBM gel, inside-out follicles attached and spread, forming polarized cell monolayers. In contrast, on thick RBM gel, inside-out follicles attached penetrated into the gel, and reorganized into properly oriented follicular structures. Polarity of the cell layer was progressively inverted while, after adhesion, cells penetrated the soft RBM gel. In the process of reorientation, cells with hybrid polarity were observed. The fraction of the apical pole which was not yet in the gel showed an inside-out orientation, while a modified orientation was observed in contact with the RBM gel. Cells which had penetrated completely in the matrix formed a new apical pole and displayed an opposite orientation of their polarity. A continuous basement membrane was observed, lining the basal cell surface when native RBM gel was present in the substratum.