A study was made of the fine structure of giant internodal cells of Nitella translucens of the type used in ion-transport work, with the aim of identifying the small membrane-bound cytoplasmic compartment which previous kinetic studies had shown to be so important in the transfer of ions to the vacuole. The results confirm the previous suggestion that the endoplasmic reticulum is the phase most likely to be responsible for the rapid exchange component in the transfer of tracer to the vacuole. The endoplasmic reticulum provides a continuum, from extensive 4/5 μm sheets just inside, and parallel to, the plasmalemma, through profiles extending from these layered cisternae through the gaps between the chloroplasts and along the inner surface of the chloroplast layer, to a tubular network in the flowing cytoplasm. The extensive sheets of endoplasmie reticulum just inside the plasmalemma would be expected to provide a very considerable barrier to the inward diffusion of ions in the cytoplasm. Large numbers of small vacuoles near the tonoplast seem to arise from dilatation of elements of the endoplasmic reticulum. Protein crystals, formed in association with large concentric complexes of endoplasmic reticulum, appear to be transferred to the vacuole via such small vacuoles, to give rise to the large protein masses often seen in the vacuole. Hence a directional transfer of material from endoplasmic reticulum to a small vacuole to the central vacuole seems to be possible. The distribution of the endoplasmic reticulum is consistent with its identification with the phase of rapid transfer of ions to the vacuole; such transfer of ions would then be associated with the formation of the small vacuoles from the endoplasmic reticulum and the subsequent fusion of these small vacuoles with the main vacuole.