During the long-term in vitro maintenance of an epithelial cell line established from rat duodenum (IEC-17) we have observed progressive morphological changes which, after approximately 4-5 months in culture, led to a loss of substrate adherence and to the formation of organoid structures characterized by organized layers of cells separated by continuous extracellular-like material and delimiting close lumina. The cells exhibited a defined polarity with deposition of extracellular matrix components on one side and development of microvilli on the opposite surface. The morphological changes observed did not appear to be the expression of spontaneous transformation since the cells retained a normal diploid rat karyotype and did not grow in soft agar. In this report we present the optical and electron microscopical characterization of the progressive organotypic differentiation of the cell line. Further studies are currently in progress to characterize the extracellular matrix during the process of differentiation.