The micro-circulatory system of the lamellae is in the form of a network of more or less parallel blood channels. A row of pillar cells separates two contiguous blood channels. All the pillar cells are situated in the same plane between the upper and lower basement membranes to which they remain fixed in position by means of columns. Histochemical investigations show that the basement membrane as well as the columns are collagenous in nature. Though both basement membranes and the columns are PAS positive (magenta colour), reticulin is not present as they do not respond to silver techniques. The development of new blood channels in the micro-circulatory system of Channa striatus has been studied. They arise as buds from the wall of the pre-existing vessels. There is some evidence to show the possible transformation of the smooth muscle cells of the tunica media of blood vessels into the pillar cells of the micro-circulatory system. Various aspects of the physiology of the micro-circulatory system of the gills have been discussed.