Sclerotia of Coprinus lagopus were produced in the laboratory and observed microscopically from initiation to maturity. Isolated bulbous hyphal cells appeared below or on the agar surface as the primary sclerotial initials. Short interhyphal cells had expanded lateral walls and increased in number at their isolated locations, and were surrounded by a thick network of normal mycelium. Increasing in numbers, the bulbous cells developed a tightly compact colony devoid of agar if submerged below the agar surface and lacked normal hyphal filaments. The outer cells thickened formed cell lumina and developed as a protective rind to the mature sclerotium.