SUMMARYA modified technique has been developed which gives greater reliability in the embedding and sectioning of lichen ascocarps for electron microscope study. It has been possible to observe stages in the development of the asci and ascospores from spore initiation through germination. The reproductive structures inPhyscia aipolia, as revealed in this study, develop much like those known for non-lichenized Discomycetes. This knowledge provides further evidence that lichen fungi are structurally typical fungi and that their specialization is at the physiological level. A nucleus caught in a hyphal pore is pictured.