When cells enzymatically digested from 21 d fetal rat calvaria are grown in ascorbic acid and Na beta-glycerophosphate, they form discrete three-dimensional nodular structures with the histological and immunohistochemical appearance of woven bone. The present investigation was undertaken to verify that bone-like features were identifiable at the ultrastructural level. The nodules formed on top of a fibroblast-like multilayer of cells. The upper surface of the nodules was lined by a continuous layer of cuboidal osteoblastic cells often seen to be joined by adherens junctions. Numerous microvilli, membrane protrusions, and coated pits could be seen on the upper surface of these cells, their cytoplasm contained prominent RER and Golgi membranes, and processes extended from their lower surfaces into a dense, highly organized collagenous matrix. Some osteocyte-like cells were completely embedded within this matrix; they also displayed RER and prominent processes which extended through the matrix and often made both adherens and gap junctional contacts with the processes of other cells. The fibroblastic cells not participating in nodule formation were surrounded by a less dense collagenous matrix and, in contrast to the matrix of the nodules, it did not mineralize. An unmineralized osteoid-like layer was seen directly below the cuboidal top layer of cells. A mineralization front was detectable below this in which small, discrete structures resembling matrix vesicles and feathery mineral crystals were evident and frequently associated with the collagen fibrils. More heavily mineralized areas were seen further into the nodule. Electron microprobe and electron and X-ray diffraction analysis confirmed the mineral to be hydroxyapatite.(ABSTRACT TRUNCATED AT 250 WORDS)