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The ultrastructure and response to ACTH of subcultured rat adrenocortical cells in two morphological and functional states are described. Fibroblastic cortical cells, which produce low levels of corticosterone, resembled myoid cells from the adrenal capsule: they formed fibrous extracellular matrix and basement membranes and contained dilated rough endoplasmic reticulum (RER), cytofilaments resembling those of smooth muscle and lamellar mitochondrial cristae. Stimulation with ACTH for 3 days increased steroid production from 0·01 to 0·56 µg 10⁶ cells^–1 24 h^–1, increased the amount of smooth endoplasmic reticulum (SER) and greatly reduced the amounts of RER, cytofilaments, basement membranes and extracellular matrix, but did not change the mitochondrial structure. Different culture conditions produced epithelial cells which secreted high levels of corticosterone, lacked extracellular matrix, basement membranes and cytofilament accumulations but contained large lipid inclusions, SER and many mitochondria with lamellar or tubulolamellar cristae and electron-dense mitochondrial matrix bodies. Stimulation with ACTH for 3 days caused an increase in steroid production from 2·3 to 30·4 µg 10⁶ cells^–1 24 h^–1, an increase in the number of Golgi complexes and the amount of SER as well as a reduction in the number of mitochondrial matrix bodies and lipid inclusions. However, no ultrastructural change occurred in the mitochondrial cristae. In both forms of cell, ACTH induced a transient increase in gap junctions. These and previous results suggest that subcultured adrenocortical cells in the fibroblastic form represent stem cells, possibly originating from the capsule, whose level of differentiation can be increased by ACTH as well as by specific culture conditions.