Morphological and functional differentiation of the mucosal surface epithelium of the bursa Fabricii was studied in White Leghorn chicken fetuses and newly hatched chickens. First signs of differentiation towards two types of epithelial cells appeared on the thirteenth day of incubation: The apical cells of the epithelial buds projected towards the lumen, and an increase in the number of Golgi regions was observed in the epithelial cells between the buds. On day 15 the follicle-associated epithelium contained small apically situated vacuoles, and large mucin granules appeared in the interfollicular surface epithelium. Towards the day of hatching both epithelial cell types were arranged to a monolayered or pseudostratified cylindrical epithelium. The follicle-associated epithelium had invaginations and small vacuoles in the apical cytoplasm, whereas the interfollicular surface epithelium had numerous microvilli on its apical surface and large mucin granules in the apical cytoplasm. In functional studies, endocytosis of colloidal carbon was demonstrated in four out of ten 19-day-old fetuses and in all chickens studied immediately after hatching.