Oil glands are initiated in the cotyledons and hypocotyl of the eucalypt embryo at a very early stage in its development, shortly after the "heart stage". The pattern of development of these glands is remarkably uniform throughout the genus. The gland is formed from a single epidermal initial which cleaves to form three tiers of cells. The epithelial cells and some of the casing cells of the gland arise from the innermost tier. A subepidermal cell also divides to add to the lower casing of the gland. The programme of divisions of the gland initial appears to be completed rapidly, well before seed maturation. No oil is secreted until a stage in germination when the cotyledons begin to expand away from each other and turn green. The oil cavity of the gland is formed schizogenously, i.e. is an intercellular space. Contrary to the opinion generally accepted in the recent literature concerning eucalypt oil glands, there is no resorption of cells, and the cytoplasm, nucleus, and cell wall of each epithelial cell persist until senescence of the cotyledon. Aspects of the cytology of the gland cells and other cells of the embryo are described. The walls separating cells formed in early stages of gland development are tenuous, non-staining, and remarkably deformable. In one species starch appears in all cells of the gland early in germination but disappears before oil formation. Throughout seed maturation, there are striking differences in the morphology of the nuclei of glands and those of mesophyll cells, which are engaged in storing reserves. The formation of the oil cavity is preceded by localized thickening of the cell walls of epithelial cells. Splitting takes place probably by hydrolysis of the middle lamella at the locus of wall thickening. The cytoplasm of the innermost casing cells appears to degenerate and these cells may fill with polyphenolic materials. The outer walls of these cells and those of some other cells of the gland become impregnated with substances such as suberin or lignin which resist acid hydrolysis.