The replication of myxoma virus was examined using thin sections of rabbit skin. The virus is assembled in the cytoplasm as crescent shaped structures which eventually form complete immature particles. These are roughly spherical, contain granular material and are limited by a unit membrane bearing spicules on its outer surface. The contents of the immature particles condense and most of the granular material is incorporated into a dumbell shaped core which has 3 electron dense layers. The residual material is compressed by the collapse of the limiting layers and this forms the lateral bodies of mature virus particles.