Structural changes inside the head of Thyone sperm undergoing the acrosomal reaction were followed with a high-resolution, differential interference contrast (DIC) video microscope. The beating sperm, adhering by their midpiece to the cover slip of a wedge perfusion chamber, were activated by a calcium ionophore (20 microM A23187) suspended in sea water containing 50 mM excess CaCl2. Before activation of the sperm, the acrosomal region appears as a 1.1-microM diameter sphere, slightly less dense than the rest of the sperm head. Upon activation, the acrosome pops; the acrosomal region suddenly swells and its refractive index drops. After approximately 1 s, a crescent-shaped periacrosomal cup appears behind the acrosomal vacuole. In the next several seconds, the cup loses more refractive index and expands forward as the acrosomal process extends. The acrosomal vacuole becomes smaller, but without appreciable drop in refractive index. These observations, coupled with the behavior of the extending acrosomal process reported in the companion paper, and in electron microscopy (EM) and early physiological studies, suggest that the acrosomal process is extended by a combination of the explosive polymerization of actin and the osmotic swelling of the periacrosomal cup material. In this paper, we also consider the meaning of the enhanced DIC image seen in the high-resolution video microscope, and discuss the reliability of measurements on small linear dimensions made with the DIC microscope.