Proliferation of the smooth endoplasmic reticulum, the site of some hydroxylating steroidogenic enzymes in foetal adrenocortical cells, is the first major change in the process of their differentiation into steroidogenic tissue. This was observed in our ultrastructural studies on foetal rabbit adrenals to begin at about day 19 of development. Morphological changes in the mitochondria, the site of production of other steroidogenic enzymes, occurred at about day 24. The elongated or rod-shaped forms of the earlier stages became flattened and rounded by this time, while the cristae were transformed from a flattened lamellar type of the earlier stages to the tubulo-vesicular form of the adult. Other changes observed included an increase in microvilli and in cell size, with a concomitant increase in thickness of the gland. Adenylate cyclase activity in foetal adrenal homogenates was assessed in response to sodium fluoride (NaF) and ACTH. All preparations responded to NaF. While good responses to ACTH were observed at days 24, 27, 28 and in the neonate, there was a lack of any significant response in the day 19 gland. Foetal ACTH was depressed by administration of cortisol, and the effects of this treatment on both the morphological changes and adenylate cyclase activity was reassessed. The response of foetal adrenals to ACTH was depressed by this treatment and differentiation of the mitochondria was arrested. These results suggest a circumscribed period for the development of ACTH-sensitive adenylate cyclase coinciding with the time at which final differentiation of the mitochondria is completed. Furthermore, both the differentiation of the mitochondria and the development of ACTH-sensitive adenylate cyclase in the foetal adrenal may be dependent on foetal ACTH secretion.