The loss of morphogenetic potential in bean suspension cultures has been investigated by measuring the amounts of phenylalanine ammonia-lyase activity induced in the cells when they are transferred from a medium in which they are grown and maintained to an induction medium. The tissue has been grown in 2 types of medium: (1) supplemented with 2,4-dichlorophenoxyacetic acid as the only growth hormone, and (2) supplemented with 2,4-dichlorophenoxyacetic acid and coconut milk. When cells were grown in medium with only 2,4-dichlorophenoxyacetic acid for a period of 5--10 subcultures and samples were transferred to the induction medium at intervals during the subcultures, the amounts of phenylalanine ammonia-lyase activity and the number of xylem elements induced progressively declined. Cells grown in the presence of coconut milk did not lose the ability to induce phenylalanine ammonia-lyase or xylem elements. Cells grown in the presence of coconut milk were cloned and clones capable of producing different amounts of phenylalanine ammonia-lyase when transferred to induction medium were obtained. However, clones producing low amounts of activity did not grow faster in the medium lacking coconut milk and no evidence was obtained to show that selective growth of non-inducible cells was responsible for the loss of morphogenetic potential. In addition to the induction brought about by the presence of naphthylacetic acid and kinetin in the induction medium the cells could also be stimulated to produce phenylalanine ammonia-lyase activity by dilution at subculture. This increase in activity occurred within 10 h of the dilution, whereas that produced by the hormones in the induction medium occurred after 120 h. The induction produced by dilution also occurred in these cells which had lost their ability to respond to the hormonal induction. Thus the mechanism that produced the increase in phenylalanine ammonia-lyase activity was intact but had lost its ability to respond to the hormones of the induction medium. The loss of inducibility was therefore probably not due to a genetic change in the cells brought about by continuous growth in a medium lacking coconut milk, but to reversible changes in the hormonal requirements of the cells necessary for induction.