Fine details of yeastlike cell development of Blastomyces dermatitidis from its conidium are described and illustrated by electron micrographs. When cultured in an enriched medium at 37C, conidia of two strains of B. dermatitidis readily underwent ultrastructural changes consistent with mycelial to yeast dimorphism. Although hyphal cells contained in the conversion cultures were observed consistently to undergo profound degenerative changes, the conidia rapidly germinated to give rise to short germ tubes which subsequently enlarged to form intermediate yeast mother cells (YMC). The wall of the germ tube arose from the innermost layer of the wall of the germinant. During the transition globoid osmiophilic inclusions of unknown origin and function were observed in vacuolated areas of the germ tube and YMC cytoplasm. Yeastlike daughter cells then budded from the intermediate YMC. Since transformation was readily accomplished under in vitro conditions favoring mycelial to yeast dimorphism, it is suggested that the conidium of B. dermatitidis represents the primary infective unit of this pathogenic fungus.