The association between cone outer segments and pigment epithelial cells in the tapetal region of the cat's retina was studied by both transmission and scanning electron microscopy. Although the cone outer segments do not reach the perikaryal surface of the pigment epithelium they are still closely associated with the apical processes of the pigment epithelium. These processes are leaf-like in shape and ensheath the cone outer segments in a unique way. Each sheath is formed usually by four processes. The base of each process is a broad cytoplasmic sheet which wraps in a spiral of one and a half to two turns in the space above the outer segment's tip. The processes of each sheath wrap concentrically in this space and form a tunnel whose wall is at least six laminae thick. Where the outer segment is inserted into the sheath, the thickness of the sheath diminishes to three or four laminae. This is because each process gradually narrows in width and, therefore, makes fewer turns. Since the processes continue to narrow as they extend along the outer segment the completeness of ensheathment gradually diminishes from the tip to the base of the outer segment. The processes finally narrow to pointed tips and some processes of each sheath reach the base of the outer segment.