Sporoblast and sporozoite formation from oocysts of the avian malarial parasite, Plasmodium gallinaceum, after the seventh day of infection in Aedes aegypti mosquitoes offers an interesting example of differentiation involving the appearance and modification of several cellular components. Sporoblast formation is preceded by (a) invaginations of the oocyst capsule into the oocyst cytoplasm, (b) subcapsular vacuolization and cleft formation, (c) the appearance of small tufts of capsule material on the previously noted invaginations, and (d) linear dense areas located just below the oocyst plasma membrane which predetermine the site of emerging sporozoites from the sporoblast. The subcapsular clefts subdivide the once-solid oocyst into sporoblast peninsulae. Within the sporoblast, nuclei migrate from the random distribution seen in the solid oocyst and come to lie at the periphery of the sporoblast just below the linear dense areas noted in the earlier stage. A typical nuclear fiber apparatus occurs in most of the nuclei seen in random sections at this stage although such a fiber apparatus may occasionally be seen in the solid oocyst stage. The nucleus, its associated fiber apparatus, and the overlying dense area appear to induce the onset of sporozoite budding from the sporoblast as well as the formation of the sporozoite pellicular complex and the paired organelle precursor. Several mitochondria are present in each sporozoite, in contrast to the single mitochondrion seen in the merozoites of the erythrocytic and exoerythrocytic stages of avian malaria infection. The paired organelles and associated dense inclusion bodies are formed by condensation of an irregular meshwork of membrane-bound, coarse, dense material. The nature of small, particulate cytoplasmic inclusions is described.