1. Each of fifty-nine strains of rhizobia, isolated from a variety of leguminous plants, proved infective upon the roots of the peanut plant. Seventeen strains markedly enhanced plant growth and nine were effective to a less extent, in contrast to thirty-three strains which were decidedly non-beneficial. 2. All nodules, irrespective of size and the sources of inocula, were located in root axils. Those produced by the non-beneficial strains were inconspicuous and tended to be visible only when the roots were immersed in water. 3. Abnormal nodose formations, which proved to be merely hypertrophied parenchymatous tissue containing heavy deposits of starch, were frequently found at the base of the rootlets of plants deficient in nitrogen. 4. Infection of roots results from invasion of rhizobia through the ruptured tissue at the site of lateral root emergence. Lateral or normal root hair formation is rare, whereas tufted whorled rosettes of hairs are common in the root axils. No data were obtained supporting root hairs as avenues of infection. 5. Origin of the nodule is in the pericyclic cells adjacent and in juxtaposition to the protoxylem strand from which a rootlet had emerged. Until such emergence the nodule remains within the endodermis. Dissemination of rhizobia throughout the bacteroidal area is effected by passive transmission of rhizobia to new cells during the laying down of the cell plate after mitosis. 6. Differentiation of the nodule results from the formation of a peripheral meristem which serves in the production of a nodule cortex and a bacteroidal area and connects with the xylem and phloem elements of the main root through a single connecting strand a the base of the nodule. 7. Spherical plastid-like bodies, identified as aleurone grains, were abundant in the infected cells of the bacteroidal area. It is thought that aleurone is directly concerned with the bacteria-plant symbiosis, and is of significance in the nitrogen-fixation process. 8. Initial stages in degeneration of the nodules are characterized by the formation of a suberized layer of cells at the base of the nodule, thereby cutting off the vascular supply. In consequence the bacteroidal area assumed a slimy consistency and rhizobia invaded the intercellular spaces. The bacteroidal area of many nodules was found to be absorbed by the plant prior to collapsed of the old nodule cortex.