Ciliated outgrowths from cultured rabbit tracheal epithelium have been characterized with scanning and transmission electron microscopy and the ciliary frequencies measured. Outgrowth surface cells change in morphology from columnar to cuboidal to squamous shapes in their progression away from the explant. The ciliated cells retain the organization of their cilia in a cluster usually centrally on the apical cell surface. Closest to the explant the nonciliated surface of ciliated cells develops extensive microvilli. Ciliary frequencies are comparable to those observed in fresh tracheal epithelium with means of 50 cells per explant ranging from 11 to 23 beats per second. For most cultures examined no correlation exists between ciliary frequency and cell distance from the explant. The goblet cells loose their ability to synthesize the characteristic mucus granules and can only be identified by the absence of cilia. Surface cells are supported by an underlying layer of discontinuous cells and connective tissue fibers. The characteristics of an outgrowth suggest that development occurs through migration of differentiated cells from the explant rather than differentiation of cell types from migrating basal cells.