Antibody-forming cells produce, as a rule, only one of several possible species of immunoglobulins at any one time. Apparently, imrnunocytes are differentiated so as to synthesize exclusively antibody of one given antigen-specifidty (1-10), biological activity (11, 12), and immunoglobulin class or subclass (4,(12)(13)(14)(15). Specialization of imrnunocytes is so extreme that only one allotypic variant of a particular immunoglobulin subclass is produced by cells possessing the genetic information for two variants (16-18). Identification of the source of the diversity among irnrnunocytes is a major goal in immunology, since it bears upon the instructive and selective theories of antibody formation. One way of studying the mechanism by which this diversity is generated, is to recognize the stages and cell types along the lymphoid and/or myeloid differentiation pathways at which specialized functions arise, and possibly, the sequential development of different levels of specialization.The immediate precursors of antibody-forming cells are units d one or more highly integrated cell types that do not release antibody, but interact with antigen and generate functional immunocytes by proliferation and/or differentiation (2, 3, 12, 19). Such integrated units, called antigen-sensitive units (ASU), are found in spleen, lymph nodes (19,20), and peripheral blood (unpublished results), and are detected by transplantation methods. Some of the cellular components of ASU are found separately in marrow and in thymus, since artificial mixtures of ceils from these and other organs yield functional ASU (21, 22). Like antibody-forming cells, splenic ASU have undergone antigen-specificity differentiation (8,9,23,24), antibody-class differentiation (12) and presumably allotypic restriction (18) before contact with antigen. Hence, diversity had occurred at least at the time of splenic ASU assembly. In a preceeding paper of this series (12) we demonstrated that splenic ASU reacting with the antigen complex of sheep erythrocytes were specialized, for they generated either hemolytic plaque-forming cells (PFC) or hemagglutinating duster-forming cells (CFC), but not both. Furthermore, some of the precursors of hemolysin-forming cells generated directl