Epithelial cells changing from the granular stage of differentiation to the horny stage are more numerous, and reveal sequential events of transformation in finer detail in the rumen epithelium than in other keratinizing epithelia thus far studied in the electron microscope. Studies of such cells indicate that transformation is initiated by the release of hydrolytic enzymes, as evidenced by the appearance of lysosomes. As lysosomes increase in number, the nucleus, ribosomes, mitochondria, Golgi apparatus, and mucous granules are gradually degraded. Furthermore, marked changes occur in permeability of the plasma membrane as voluminous amounts of the lysed cell components pass through and accumulate in the intercellular space in the form of an amorphous mass. Filaments, keratohyalin granules, and the content of the ER (ER-protein) are not lysed, revealing the action of released enzymes to be specific. During transformation, filaments become displaced toward the cell periphery and keratohyalin granules disperse and mix with the ER-protein in the cell center. Subsequently, the keratohyalin-ER-protein complex infiltrates the filament network whereby a fibrous-amorphous cell content is formed. Loss of fluids through the plasma membrane leads to reduction of cell volume and consolidation of the remaining cell content. The deep interdigitations formed between the cells ultimately interlock the outer part of the epithelium into a cohesive and protective stratum corneum.