The effect of penicillin on the structure of Bacillus megaterium cells was followed in media with and without osmotic stabilization. In peptone without osmotic support the cells showed a distortion of the normal membrane-wall relationship by 20 minutes. This appeared to be a combination of both membrane distortion and cytoplasmic leakage. Lytic changes quickly followed. With osmotic support a clean-cut lesion at the transverse-septal site developed by 10 minutes' growth in penicillin. The membrane lost its normal relationship to the cell wall and formed a pocket which was filled with a fibrous material which appeared to be unorganized wall mucopeptide. The pocket of fibers enlarged until the cell either lysed or formed a protoplast.

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