Ultrastructural examination of an alveolar rhabdomyosarcoma revealed that the bulk of the tumor was composed of small polygonal cells containing polyribosomes, short strands of rough endoplasmic reticulum, and variable amounts of glycogen; the cells were joined by small desmosome-like structures. Similar cells, as well as a variety of larger forms which appeared to be derived from the small cells, were observed along the septa; the larger forms developed a copious cytoplasm and occasionally produced myofilaments. Some of these cells were separated from the septa by basement membranes. Giant cells were also present in the alveolar spaces; these formed neither basement membranes nor myofilaments. The septa themselves were composed largely of collagen and fibroblasts. It is suggested that the commonly proposed correspondence of alveolar rhabdomyosarcoma to the myotube stage of muscle differentiation is incorrect; if anything, the overall pattern of the tumor is epithelial-like, and may correspond to the organization of mesenchymal cells at the stage of somite differentiation. The resemblance of the masses of small tumor cells to the cells of Ewing's sarcoma is discussed.