We have investigated whether interactions between cell-surface macromolecules play a role in cellular recognition leading to specificity in the establishment of intracellular symbiosis between dinoflagellates and the polyp (scyphistoma) stage of the jellyfish Cassiopeia xamachana. All strains of the symbiotic dinoflagellate Symbiodinium microadriaticum were phagocytosed by the endodermal cells of the scyphistomae when presented to them as cells freshly isolated from their respective hosts. The rates of phagocytosis of such cells were high, and were directly correlated with the presence of a membrane, thought to be the host cell vacuolar membrane that surrounds the freshly isolated algae. Cultured algae lack this membrane. All cultured algae, even those that proliferate in host tissues, were phagocytosed at very low or undetectable rates. Freshly isolated algae treated with reagents that removed the host membrane were phagocytosed at low rates. The endodermal cells of the scyphistomae of the non-symbiotic medusa Aurelia aurita also phagocytosed freshly isolated algae, but did not phagocytose cultured algae. Phagocytosis of algae and carmine particles was found to be a competitive process in scyphistomae of C. xamachana. No correlation was observed between the surface electrical charge on algae and their phagocytosis by host endodermal cells. Neither was there any correlation between phagocytosis and persistence. We conclude that the specificity in symbioses between marine invertebrates and dinoflagellates appears to be regulated by processes that occur after potential algal symbionts are phagocytosed.