The morphological aspects of biosynthesis of cellulose by Acetobacter xylinum and Acetobacter acetigenus were studied by transmission electron microscopy of both freeze-etch replicas and sections of cellulose-free cells in suspension culture before and subsequent to the induction of cellulose synthesis. Also examined were freshly synthesized, thoroughly washed, cellulose pellicles. Thin sections of rapidly dividing, glucose-metabolizing cells of both species showed irregular features on the cell surface including a small polar invagination which sometimes contained or was associated with fibrils as fine as 3 nm in diameter of a substance which stains with electron-microscopic counterstains. Cellulose microfibrils in thin sections of freshly synthesized pellicles were coated with a surface material which also stained with the same counterstains (uranyl ions and lead ions). The effect of air-drying on freshly synthesized cellulose was striking. When examined by freeze-etching, thoroughly washed, never air-dried pellicles of both species showed a nascent form of cellulose fibril which consisted of a central, dense core surrounded by a sheath of amorphous gel. This sheath may be up to 100 nm wide. When the pellicle was air-dried and rehydrated before freeze-etching, the amorphous sheath was rare and shrunken but ordinary microfibrils of classical dimensions were visible. The sheath and core are sometimes closely associated with the envelope of the cells of both species. These observations can be interpreted in the context of recent advances in cellulose synthesis by assuming that chains of an initial, highly hydrated, intermediate polyglucan are released from the cell and that such chains associate to form a nascent fibril external to the cell but associated with the cell envelope. Air-drying of nascent fibrils converts them to classical microfibrils and this conversion is considered here in molecular terms.