A description is given of the ultra-structure of the eye of Drosophila melanogaster during its development from the imaginal bud of the late larva till it attains its final form in the adult. Six markedly different types of cells develop out of the apparently uniform epithelium of the imaginal bud; namely, cone cells, retinula cells, primary pigment cells, secondary and basal pigment cells, two [inner and outer] types of hair-nerve cells. In each type of cell there is a characteristic form of cytoplasmic double-membrane structure [endoplasmic reticulum] which reaches its highest development at or just before the time at which the characteristic cell structures are being formed. In most types of cell there are indications of the participation of the nucleus, or nuclear envlope, in cell differentiation, these indications being different in the different cell types. In retinula cells and also in inner hair-nerve cells there is evidence suggesting that the outer layer of the nuclear envelope may give rise directly to cytoplasmic double membranes. Several cell organelles are described for the first time, in particular the rhabdomere vesicular spheroids and the cone cell granules. In the formation of the rhabdomeres by the retinula cells, the first stages in the deposition of this structure are carried out by the plasma membrane on the cells. The presence of an eighth retinula is confirmed. The implications of the observations for our general understanding of cell activities during differentiation is briefly discussed; work already in progress with various mutants is expected to reveal new facts of interest in this connexion.