Based on electron microscopic observations, the reproductive cycle of a relatively stable L-phase variant of Streptococcus faecalis was proposed. The small, dense, nonvesiculated L-form is envisioned as the central (core) element. It was seen to divide and bud rapidly. In addition, the dense forms appeared to be capable of growth and development within vesicles of mature mother forms. When these forms were released from the vesicles into the surrounding fluid medium, further growth occurred, resulting in the development of immature and ultimately mature mother forms. Under conditions unfavorable for L-form growth, these dense forms developed first into transitional forms and then into the bacterial form. These dense forms might therefore be considered as undifferentiated "stem cells' with the capacity to develop along several different routes, depending upon the stimulus received.