Correlative microscopy of the developing respiratory epithelium during mucous cell differentiation reveals a decrease in the concentration of ciliated cells concomitant with proliferation of mucous cells and formation of an inner layer of the mucous blanket. Nonciliated cells increase in concentration between 40 and 80 days postnatal and provide the major surface area of the tracheal epithelium. Nonciliated cells change from isolated small patches with flat, finely-corrugated surfaces to larger, rounded aggregates with bulging cytoplasmic contents. Individual, nonadjacent ciliated cells are distributed around the borders of aggregates. By 120 days the precise boundary of each aggregate is lost as the epithelium develops more smooth contour. In the major bronchi, ciliated cells occur primarily in the clefts between bronchial folds. Cells in these clefts also provide for the origin of goblet cells, observed by 80 days and heavily concentrated here at 120 days. Nonciliated cells with smooth surfaces (dome cells) occupy the ridges of bronchial folds and their morphology varies little up to 120 days. A tannic acid technique was used to demonstrate the development of the inner layer of the mucous blanket. The layer begins as a thin fibrillar coat on the surface of the tracheal and bronchial epithelium at 40 days. It becomes progressively thicker in the trachea but changes little in the bronchi.