In rat embryos, acetylcholinesterase (AChE, EC 188.8.131.52) activity is present in a continuous sleeve of mycocytes that extends from the myocardium that is adjacent to the atrioventricular endocardial cushions via the ventricular trabeculae to the outflow tract. No activity is found in the atrial roof, in the ventricular walls and in the interventricular septum except for its subendocardial surface. AChE-positive cells are first identified in 11-day rat embryos, while the prototypical distribution is best demonstrable in 13-day embryos. Part of the AChE-positive cell system is identifiable as a precursor of the adult conduction system by topographical criteria in 16-day fetuses and by morphological criteria in 20-day fetuses. At birth (2 days later), AChE activity has disappeared from the cardiac myocytes except for a ring of tissue at the atrial side of the atrioventricular junction. These findings suggest that the embryonic heart can be divided into an upstream mycardium that has no AChE activity and a downstream myocardium that is characterized by the presence of AChE. Furthermore they suggest that an acetylcholine-dependent mechanism may be responsible for the retardation of the depolarization wave in the downstream parts of the heart. Finally they show that the adult conduction system is formed by a transdifferentiation of part of a far more extensive embryonic precursor system.