An in vitro culture system for primary mesenchyme cells of the sea urchin embryo has been used to study the cellular characteristics of skeletal spicule formation. As judged initially by light microscopy, these cells attached to plastic substrata, migrated and fused to form syncytia in which mineral deposits accumulated in the cell bodies and in specialized filopodial templates. Subsequent examination by scanning electron microscopy revealed that the cell bodies and the filopodia and lamellipodia formed spatial associations similar to those seen in the embryo and indicated that the spicule was surrounded by a membrane-limited sheath derived by fusion of the filopodia. The spicules were dissolved from living or fixed cells by a chelator of divalent cations or by lowering the pH of the medium. However, granular deposits found in the cell bodies appeared relatively refractory to such treatments, indicating that they were inaccessible to agents that dissolved the spicules. Use of rapid freezing and an anhydrous fixative to preserve the syncytia for transmission electron microscopy and X-ray microprobe analysis, indicated that electron-dense deposits in the cell bodies contain elements (Ca, Mg and S) common to the spicule. Examination of the spicule cavity after dissolution of the spicule mineral revealed openings in the filopodia-derived sheath, coated pits within the limiting membrane and a residual matrix that stained with ruthenium red. Concanavalin A--gold applied exogenously entered the spicule cavity and bound to matrix glycoproteins. Based on these observations, we conclude that components of the spicule initially are sequestered intracellularly and that spicule elongation occurs in an extracellular cavity. Ca2+ and associated glycoconjugates may be routed in this cavity via a secretory pathway.