Intercostal muscle from fetal and newborn rats was examined with the electron microscope. At 16 days' gestation, the developing muscle was composed of primary generations of myotubes, many of which were clustered together in groups. Within these groups, the membranes of neighboring myotubes were interconnected by specialized junctions, including tight junctions. Morphologically undifferentiated cells surrounded the muscle groups, frequently extended pseudopodia along the interspace between adjacent myotubes, and appeared to separate neighboring myotubes from one another. At 18 and 20 days' gestation, the muscle was also composed of groups of cells but the structure of the groups differed from that of the groups observed at 16 days. Single, well differentiated myotubes containing much central glycogen and peripheral myofibrils dominated each group. These large cells were interpreted as primary myotubes. Small, less differentiated muscle cells and undifferentiated cells clustered around their walls. Each cluster was ensheated by a basal lamina. The small cells were interpreted as primordia of new generations of muscle cells which differentiated by appositional growth along the walls of the large primary myotubes. All generations of rat intercostal muscle cells matured to myofibers between 20 days' gestation and birth. Coincidentally, large and small myofibers diverged from each other, leading to disintegration of the groups of muscle cells. Undifferentiated cells frequently occurred in the interspaces between neighboring muscle cells at the time of separation. Myofibers arising at different stages of muscle histogenesis intermingled in a checkerboard fashion as a result of this asynchronous mode of development. The possibility of fusion between neighboring muscle cells in this developing system is discussed.