The morphological development and plasticity of embryonic and postnatal rat adrenal medullary cells were studied in homologous adrenal grafts to the anterior chamber of the eye. The eyes of recipient rats were adrenergically denervated 10 days prior to grafting by extirpation of the superior cervical ganglion in order to increase levels of NGF and NGF-like activities in the iris. Grafts taken at the 15th day of embryonic development (E15), i.e., at the beginning of immigration of medullary progenitor cells into the adrenal cortical anlagen, contained no cortical or mature medullary cells after 2 weeks in oculo. Numerous sympathoblastic cells, however, were located at the anterior surface of the iris. E 16 and E 17 transplants showed abundant mature cortical tissue after 2 weeks. Small groups of medullary cells with the ultrastructural characteristics of mature pheochromoblasts or young chromaffin cells were interspersed among cortical cells without forming a discrete medulla. Neuronal cells were exclusively found outside the cortical cell mass. Sympathoblasts grew at the surface of the iris, while young sympathetic nerve cells, which were invested by Schwann cells and received synaptic axon terminals, were embedded into the stroma of the iris. Grafting of E 21 adrenals yielded very similar results except that, in a few instances, young chromaffin cells were located outside the cortex and sympathetic nerve cells were seen to be in close contact with cortical cells. In transplants of adult medullary cells typical mature adrenaline and noradrenaline cells were clearly distinguishable after 8 weeks even in the absence of cortical cells. The only indication of phenotypical changes in these cells was the formation by some of them, of neuritic processes which could be visualized in glyoxylic acid-treated whole mounts of irises. These results are compatible with the idea that embryonic adrenal medullary cells have the environmentally controlled potential to develop along the neuronal or endocrine line, but could also be interpreted in terms of a selection of a specific subpopulation with predetermined potentialities by a specific microenvironment. Moreover, these results suggest that increasing differentiation of medullary cells is accompanied by progressive restrictions in their genetic program, which eventually prevent full transdifferentiation of mature chromaffin into neuronal cells.