Observations concerning morphology, structure, and ontogeny of the thallus of a squamulous species,Endocarpon pusillumHedw., are presented. The latter is composed of squamules, most of which are interconnected by a well developed network of rhizomorphs. Four types of squamules have been distinguished according to their morphological characters and their location with regard to rhizomorphs. The squamules ofE.pusillumare characterized by the lack of lacunae and the presence of numerous rhizomorphic-like hyphae in the medulla, which are in topographical relation with the hyphae of the rhizomorphs. Morphological and structural data allowed us to follow an ontogenic continuum from the smallest squamules, i.e. the least differentiated, to the one bearing fruiting-bodies, which show numerous rhizomorphs.