Developmental biologists show an increasing interest in fungi as model systems for studies on cell differentiation and morphogenesis. On the one hand, fungi can be easily handled in the laboratory and are amenable to genetic and biochemical analysis. On the other hand, they display many of the features characteristic for development in plants and animals and allow for an examination of both time-dependent and spatial differentiation of cells. Under certain conditions fungal cells respond to changes in the external milieu as do bacteria. This makes it easy to study enzyme regulation and also allows for synchronization of development. Yet, during development of multicellular structures the organism can behave as a more or less closed system in which intercellular communications occur. This can be observed e.g. during fruit-body formation in basidiomycetes. Fungi offer many cases in which cellular interactions can be conveniently studied, one example of which will be detailed by van den Ende (this Symposium). Another area in which fungi are advantageous for study is cell morphogenesis because of the regularity and the relative simplicity of the structures formed. One example is the formation of hyphal tubes that can be studied by examining regeneration and reversion of protoplasts (cf. de Vries and van der Valk, this Symposium).