Detailed cytological changes that accompany the rejuvenation of resting cells of Melosira granulata were studied with the electron microscope. Dormant and viable cells that we previously classified as the condensed state generally contain definable chloroplasts, mitochondria, a nucleus and other cytoplasmic remnants. However, there appears to be a continuous cytoplasmic degradation spectrum and some cells which appear intensely colored with the light microscope have discontinuous chloroplast membranes and few other cytoplasmic remnants. Rejuvenation of viable dormant cells is initially accompanied by the accumulation of both lipids and polyphosphates. In the earliest stages of expansion, these storage products are dispersed throughout the cell. In later stages of expansion, the lipids appear to be coalesced into larger droplets which are easily identified as the light microscope level. The fully expanded stage is characterized by the normal complement of organelles and their arrangement at the periphery of the cells and central cytoplasmic bridge. These cells appear both anabolically and catabolically active as evidenced by the abundance of endoplasmic reticulum, ribosomes and secretory and lytic vesicles. Prior to cell division, both lipids and polyphosphates are reduced or absent in the cells. The ultrastructural features of the dormant, condensed state in resting cells of M. granulata are similar to those described for hypnospores. A rejuvenation sequence that produces cytological features common to resting state formation could provide a population of cells which could easily revert should environmental conditions become adverse.