The interstitial tissue of the opossum testis includes interstitial or Leydig cells, macrophages, and small cells which morphologically resemble mesenchymal cells. The latter are thought to give rise to mature interstitial cells. The most prominent feature of the interstitial cell cytoplasm is an exceedingly abundant agranular endoplasmic reticulum. This reticulum is generally in the form of a meshwork of interconnected tubules about 300 to 450 A in diameter, but occasionally it assumes the form of flattened, fenestrated cisternae resembling those of pancreatic acinar cells, except for the lack of ribonucleoprotein particles on the surface of the membranes. The interstitial cells vary considerably in their cytoplasmic density. The majority are quite light, but some appear extremely dense, and in addition usually have a more irregular cell surface, with numerous small pseudopodia. These differences may well reflect variations in physiological state. Cytoplasmic structures previously interpreted as "crystalloids" consist of long bundles of minute parallel tubules, each about 180 A in diameter, which seem to be local differentiations of the endoplasmic reticulum. The mitochondria are rod-shaped, and contain a moderately complex internal membrane structure, and also occasional large inclusions that are spherical and homogeneous. The prominent juxtanuclear Golgi complex contains closely packed flattened sacs and small vesicles. The results of the present study, coupled with biochemical evidence from other laboratories, make it seem highly probable that the agranular endoplasmic reticulum is involved in the synthesis of the steroid hormones produced by the interstitial cell. This finding therefore constitutes one of the first functions of the agranular reticulum for which there is good morphological and biochemical evidence.