The formation of otoconia in the endolymphatic sac (ES) of the larval newt, Cynops pyrrhogaster, has been studied by light and transmission electron microscopy. Some of the epithelial cells of the ES contain an abundance of swollen vesicles, Golgi complexes, rough endoplasmic reticula and ribosomes at the late larval stages 50 and 51, approximately 26-30 days after eggs are laid. Five days later, at stage 52, crystals are present in the vacuoles between the epithelial cells. Serial sections indicate that these vacuoles actually form small canals which lie in the wall and join the lumen of the ES. Reconstruction of the ES shows that several canals are contained in the ES wall. At stage 56, about 72 days after eggs are laid, a large number of otoconia are present in the ES lumen, while the otoconia disappear from the canals. It appears that the otoconia are first produced in the canals and then released to the lumen. Some epithelial cells of the ES are thought to expel the organic and inorganic material to the canals to form the otoconia in situ. The process of formation of the otoconia in the ES is discussed.