Incidental to studies of keratinization of the equine hoof wall, annular gap junctions were found in the stratum spinosum of the intertubular horn of the stratum medium. Adjacent cells of the stratum spinosum showed extensive gap junctions, and often local invaginations of one cell into another were bound by gap junctions. It is proposed that these invaginations become detached from the cell surface to form the annular gap junctions. Formation of annular gap junctions may be a means of disposing of plasma membrane in response to changes in cell volume or shape occurring in keratinization. Interiorization of gap junctions may also facilitate cell movement, and perhaps may act to reorganize desmosome-tonofibril arrangements by budding off appropriate interdesmosomal areas, thus drawing the desmosomes closer to one another.