In an electron microscopic study of the pigmented basal cell epithelioma, the high degree of activity of the dendritic cell is pointed out. The melanocyte is increased in size and the nucleus is multilobed. The cell is richly dendritic, and is producing an abundance of melanosomes. The granules produced accumulate in the dendritic tips of the melanocytes and are not passed to any great extent to the neoplastic epithelial cells. Thus, most of the pigment within the tumor is found in the large dendritic cells. The symbiotic relationship of epidermal cells and melanocytes is stressed.