The ultrastructure of the corpus luteum of the sheep has been examined at the mid-stage of the estrous cycle when progesterone secretion is active. Secretory granules are associated with the secretion of this hormone, and the evidence indicates that the granule membrane becomes incorporated into the plasma membrane during exocytosis. Further evidence of this process has been obtained from studies on the uptake of horseradish peroxidase by the luteal cells.