The development of chicken ultimobranchial glands was studied by electron microscopy. As early as at 8 days of incubation, some cells contained a few secretory granules, although most of the ultimobranchial cells were undifferentiated. Single axons or small bundles of axons were occasionally detected in close contact with the ultimobranchial cells. Subsequently, immature C cells gradually increased in number with age. At 12 days of incubation, the developing C cells, which contained some secretory granules from 60 to 200 nm in diameter, occupied the greater part of the gland. The cells were oval, elongated or irregular in shape and frequently gave rise to long cytoplasmic processes that touched other C cells. Numerous axons enveloped with Schwann cell processes occurred in close vicinity to C cells. At 14 days of incubation, the cytoplasmic processes of C cells reached their maximum number and size. Desmosome-like membrane specialization was observed at the contact between the processes and cell bodies of other C cells, while numerous microtubules were arranged in parallel to the long axes of the processes, and secretory granules were distributed along them. Thus, the C cells at these stages seem to regulate other homologous cells by direct contact. Axon terminals, which contained small, clear and large, dense-cored vesicles, were first found in direct contact with the surface of C cells in 14-day-old embryos. Subsequently, the cytoplasmic processes of C cells progressively decreased, while nerve fibers continued to increase in the ultimobranchial glands. At the late stages of embryonic development, many C cells displayed an oval outline and increased number and size of secretory granules. At hatching, many C cells were filled with large secretory granules ranging from 200 to 700 nm in diameter (average 300 nm). Some cells were still elongated or irregular in shape and contained small secretory granules, 60-200 nm in diameter.