Gametangium-like structures were found on the sides of utricles of Codium edule collected during the latter period of its growing season in southern Taiwan. They are usually fusiform and bigger than the regular gametangia, but do not contain gametes. In addition, the gametangium-like structures bear protuberances on their surface, a character not observed in regular gametangia. In culture, the protuberances extended into filaments that developed new utricles terminally after two weeks. This indicates that the gametangium-like structures, named propagation buds, have the potential to form new thalli and can be regarded as an effective reproductive structure. In the field, the abundance of both gametangia and propagation buds on the macrothalli of C. edule was highest towards the end of its growing season, in August. Microspectrophotometric studies with DAPI showed that relative fluorescent units of nuclei in propagation buds were similar in number to those in the utricles, and were higher than those in the gametangia. We suggest that the propagation buds are possibly transformed gametangia with incomplete meiosis. The propagation buds may serve as a persistent stage when the macrothalli disintegrate at the end of the growing season, and act as a "seed bank" for vegetative reproduction for C. edule in the next season.