This study of innervation of the bone marrow in new-born rats demonstrates that major signs of differentiation occur in the nerves at the end of the second week after birth. Myelinated nerve fibers begin to acquire their myelin sheath at this time. The Schwann cells show abundant ergastoplasmic reticulum. Some of these cells separate individual axons and wrap them up with the double membranes that form the myelin sheath. From then on, the nerves of the marrow contain both myelinated and nonmyelinated fibers. Fibroblasts also differentiate during this time, producing collagen fibers around the nerves. Some fibroblasts are interconnected by desmosome-like structures. Fibroblasts and collagen fibers form the connective tissue sheaths of the nerve (perineurium and endoneurium). Upon completion of the myelin sheath by the Schwann cells and the connective tissue sheath by the fibroblasts, nerves of the marrow acquire the morphological characteristics of the peripheral nerves of the adult animal. The fine structure of the axons in contact with the muscle fibers of the arterial wall correspond to Type 2-a of Watari. These nerve fibers are considered to be of sympathetic type. The time of maturation of nerves in the bone marrow coincides with the beginning of responsiveness to stimulatory and inhibitory conditions demonstrated in this organ by other authors.