The fusion cell in Gracilaria verrucosa (Huds.) Papenfuss is large, multinucleate and irregularly shaped. It originates from cytoplasmic fusions of haploid and diploid cells, and expands continuously by incorporating adjacent vegetative cells. Plastids are arrested in their development remaining in a proplastid state. Mitochondria possess ring-like structures. Dictyosome activity is limited to forming the first wall layer. Large mucilage sacs, formed from ER, discharge their contents, thereby contributing to the formation of a second wall layer. Copious amounts of floridean starch as well as crystalline inclusions and osmiophilic granules are present in the cytoplasm. Numerous cisternae of endoplasmic reticulum occur in concentric stacked aggregations. Dark-staining, spherical masses in the cytoplasm may represent condensed, inactivated haploid chromatin. Ultrastructural features of the fusion cell indicate that it has a nutritive function.