The cellular and ultrastructural distribution of carcinoembryonic antigen and secretory component during differentiation of normal colonic epithelium and in colonic carcinomas was evaluated by peroxidase-labeled antibody immunocytochemistry. Carcinoembryonic antigen and secretory component were found to be markers of distinctly different stages of normal colonocyte differentiation. Whereas secretory component was expressed principally by proliferating absorptive cells in the midcrypt, carcinoembryonic antigen expression was diminished in this crypt zone and was associated principally with mature columnar cells at the luminal surface and with undifferentiated cells at the crypt base. Carcinoembryonic antigen was preferentially expressed on the microvillar plasma membrane and secretory component on the basolateral plasma membrane in the normal colon. In 13 colon cancers studied, carcinoembryonic antigen was expressed on the entire surface of all the colon cancers except one anaplastic tumor, whereas secretory component was only expressed on five well or moderately differentiated cancers. These observations suggest that differentiation of colon cancers as assessed by morphology and phenotypic markers is not totally analogous to that found in the normal colon.