The derivation of membranous epithelial (M) cells, which are specialized antigen sampling cells overlying the lymphoid follicles of Peyer's patches, is unknown; it has been suggested recently, however, that M cells differentiate from absorptive cells on the follicular epithelium. To examine whether M cells, like other intestinal epithelial cells, derive directly from undifferentiated crypt cells, we studied the structure, selected functional features, proliferation, and distribution of Peyer's patch M cells in the ileum of adult mice. We observed a spectrum of M-cell structure ranging from mature to immature-appearing M cells. Most immature-appearing M cells lacked the central cytoplasmic hollow found in those mature M cells that contained lymphoid cells. The microvilli of immature-appearing M cells were more numerous and regular appearing than those of mature M cells, but they were sparser and shorter, and some were wider than those of absorptive cells. Many immature-appearing M cells contained more free ribosomes than did mature M cells. Both mature and immature-appearing M cells were observed on all regions of follicular domes, including the base near the mouths of surrounding crypts. Type 1 reovirions adhered with considerable selectivity to the apical membrane of mature and immature-appearing M cells but were observed in endocytic vesicles only in mature M cells. Neither mature nor immature-appearing M cells showed evidence of lipid absorption, in contrast to adjacent absorptive cells. Both mature and immature-appearing M cells internalized more bound cationized ferritin than did absorptive cells. Only mature M cells transported cationized ferritin to the intercellular spaces. Nuclei of a few immature-appearing M cells were labeled 24 h after injection of [3H]thymidine in concert with the appearance of labeled absorptive cell nuclei. These observations strongly suggest that many, if not all, M cells derive directly from undifferentiated crypt cells.