The liver of male rats has been studied after CPIB stimulation by using the peroxidase reaction for localizing catalase in hepatic cells. CPIB administration leads to an increase in the number of microbodies, and it is suggested that one mechanism by which microbody proliferation occurs is a process of fragmentation or budding from preexisting microbodies. Reaction product was observed not only within the microbody matrix, but outside the limiting membrane of the microbody and in association with ribosomes of adjacent rough endoplasmic reticulum. This localization of reaction product is interpreted as evidence that catalase after synthesis on rough endoplasmic reticulum may accumulate near microbodies and may be transferred directly into these organelles without traversing the cisternae of the endoplasmic reticulum or Golgi apparatus.