The X zone is a wide juxta-medullary layer of cells in the adrenal glands of young mature virgin female mice. Usually the zone begins to degenerate about the 7th day of pregnancy, approximately 48 h after implantation of the embryo. By the 15th day of pregnancy the X zone has disappeared. The pattern of X-zone degeneration found in normal pregnancy can be reproduced in young mature virgin mice by allowing transplants of fertilized eggs from donor mice to grow either in the anterior chamber of the eye or under the kidney capsule. These growths are chiefly composed of trophoblast. In castrated mice and in immature females with such growths the X zone is unaffected. The ovary is therefore an essential factor in the train of events leading to X-zone degeneration. In addition, in the ovaries of females in which transplanted eggs had grown and in which the X zone had degenerated, there were corpora lutea resembling the functional ones in the ovaries of pregnant mice. Portions of ventral prostate from 21-day-old males were grafted into the anterior chamber of the eye. In normally pregnant mice such grafts gave clear evidence of stimulation by the 15th day of pregnancy. The prostate grafts in virgin females injected with testosterone were also stimulated; a dose of 20μg, which caused disappearance of the X zone, gave a stimulation equivalent to that seen in the graft of 15-day pregnant mice. Some indication of prostate graft stimulation occurred in mature unmated females with growths from fertilized eggs. It is suggested that the mechanism of X-zone degeneration during first pregnancy is the production, in the first place, of a substance (luteotropic in nature) by the trophoblast of the developing embryo. This secretion acts upon the corpus luteum which, as a secondary effect of progesterone formation, produces an andromimetic substance. This, in turn , acts directly on the X zone to cause its degeneration together with the formation of a connective-tissue capsule around the medulla.