SUMMARYTwo strains of filamentous, branching, budding organisms were isolated, one from sand and the other from the foam of a sewage-treatment pjant. These organisms are very fine, their hyphae and cells having a diameter of about 1μm. They differ from actinomycetes in having a eucaryotic cytology, walls with no murein and being resistant to antibacterial antibiotics and sensitive to strictly antifungal ones. Considered as fungi they have been tentatively placed in the genusFusidiumLink. Unusual cytological features were observed. These included nuclei and mitochondria with membranous extensions, looped cristae in some mitochondria, an atypical nuclear membrane and an abundance of mesosomes.