1. Cephalothrix rufifrons is a nemertean with a direct type of development. The spherical larva which escapes from the egg-membrane, is equipped with the rudiments of most of the adult organs. The later larva is elongate and shows advance in the further differentiation of its tissues and organs and in the development of a head-gland. 2. Fertilization is internal, and the eggs, when laid, have a surrounding fertilization (egg-) membrane within which lie the two polar bodies. 3. Cleavage of the spiral type leads to the formation first of a spherical, and later of an elongate blastula in which macromeres and micromeres can still be distinguished. None of the organ ‘Anlagen’ are recognizable at this stage. 4. Gastrulation is effected by invagination, and involves both endoderm and ectoderm so that the blastopore is carried into the lumen of the gut to mark the channel between fore-gut and mid-gut. The blastopore subsequently closes and stomodaeum and mesenteron are separated. 5. The mesoderm arises as four groups of cells, presumably from four teloblasts situated antero- and postero-lateral to the blastopore and may probably be referred to the blastomeres 2a1111-2d1111. Isolated mesenchymal elements of ectodermal origin are also to he found. 6. For a time the germ-layers are indistinguishable, but a process of absorption of yolk and reserve food material precedes the differentiation of the three layers. 7. Owing to the confusion of the germ-layers at the time of appearance of the mesoderm, the true nature of the secondary body-cavity, whether it be a re-expansion of the blastocoel or a true coelom, remains a matter of doubt. 8. The embryonic stomodaeum persists in the larva after differentiation of the elements of its wall which are essentially similar to the cells of the general ectoderm. Long cilia project into the lumen, and unicellular glands with granular contents are formed from epithelial cells. 9. The mid-gut wall, after re-organization of its cells, becomes single layered and ciliated. Glands similar to those of the stomodaeum are later developed. 10. Communication between fore-gut and mid-gut is re-established at the base of the ventral pocket of the latter, at or near the point of closure of the blastopore. 11. A ‘hind-gut’ is not formed until very late in development, and it is considered to be endodermal and not in the nature of a proctodaeum. 12. The ciliated epithelial cells of the ectoderm are triangular in section, and from them are differentiated two types of gland cell, small unicellular glands distributed over the general surface, and large posteriorly placed mucus cells. 13. Two dorso-laterally situated invaginations arising during the gastrulation phase are the ‘ Anlagen’ of the greater part of the nervous system. Dorsal and ventral ganglia and the commissures arise directly from these rudiments, while the lateral nerve-cords grow out posteriorly from the ventral ganglia. The stomodaeal nerve is at least in part derived from ectodermal elements of the stomodaeal region. 14. Immigration, and later, imagination of the ectoderm cells at the anterior end of the larva give rise to the proboscis rudiment and rhynchodaeum. 15. The pear-shaped head-gland elements are derived from ectodermal epithelial cells. At first their contents are granular, and do not take up stain, but later they are filled with a fluid deeply staining with the haematoxylins. 16. The formation of nephridia and cerebral organs has not been observed, and it is concluded, that the latter are at no time present. 17. The relationships of the various developmental types of the Nemertea are discussed, and the conclusion is reached that there are two types of direct development, one characteristic of the enoplous nemerteans and the other of the Palaeonemertini. The pilidium and larva of Desor of the Hetero-nemertini are more closely allied to the simpler direct development of the Palaeonemertini than to that of the Enop1a. Of the four types the palaeonemertean development is the least specialized and is most reminiscent of the platyhelminth condition.