This case report describes an unusual parotid salivary gland tumor in which major proliferating elements arise in relation to well-differentiated, branching ducts. Both light and electron microscopic examination indicates that these ducts are formed by two distinct cell layers, an inner row of luminal epithelial cells and an outer layer of modified myoepithelial cells. It is from this outer layer of cells that discrete clusters of uniform basaloid cells develop. Although the majority of basaloid nests were relatively compact, a few showed a small number of clear, slightly widened, intercellular spaces which, ultrastructurally, were lined with basal lamina. Particularly in one area of the lesion, clusters of basaloid cells showed increasing numbers and sizes of these intercellular spaces with the gradual formation of an adenoid cystic pattern of differentiation. Even in this situation, however, luminal epithelial cells forming ducts could still be identified. The bidirectional cellular differentiation, the origin of basaloid clusters in relation to modified myoepithelial cells, and the mode of development of intercellular spaces resulting in an adenoid cystic pattern all have important implications for the histogenesis of salivary gland tumors.