1. 1. On media containing RNA some strains of Gloeotinia temulenta produce sectors of a mutant with unusual morphological characteristics. Only a limited number of strains have yielded this particular mutant and RNA cannot, apparently, be replaced by any of the purine or pyrimidine bases occurring in nucleic acis. Although strikingly different in morphology the nutritional requirements of the mutant are not different from those of the parent strain. 2. 2. On agar media the mutant forms pink slimy colonies which consist entirely of elongated cells which reproduce by budding (in contrast to the normal mycelial development). When cells of the mutant are transferred to fresh medium their behaviour varies according to the density of the inoculum. With dense inoculum the cells continue to bud; when, however, the cells are well distributed they develop a mycelium with apparently normal (i.e. parental) type conidiophores and conidia. This normal phase is of short duration; when conidia are produced they become elongated and proceed to reproduce, by budding, to yield a pink mutant colony. 3. 3. Cultures of the mutant regularly produce stable mycelial variants. These cannot be regarded as back mutations since although they have a general resemblance to non-mutant strains they never exactly resemble the parent strain from which the mutant was derived. 4. 4. Cytologically the mutant strains show disturbed RNA metabolism. In the unicellular budding condition cytoplasmic RNA is variable but generally low and there is no evidence of nucleolar activity. During the normal phase cytoplasmic RNA is high and there is considerable nucleolar activity. Further in the transition from the budding form to the normal phase increase in RNA precedes change in cell morphology. There is no evidence that the chromosome complement of the mutant differs in any way from that of the parent strain. 5. 5. It has been concluded that cell morphology in G. temulenta and other micro-organisms is closely associated with the level of cytoplasmic RNA and that the unicellular budding condition of the mutant form described here is due to the production (by the mutant) of a diffusible substance which specifically inhibits RNA synthesis.