Hepatomas were induced in rats by feeding N-nitrosomorpholine. Nodules from alpha-1-fetoprotein (AFP) producing hepatoma were taken and subcutaneously injected into syngeneic hosts. Transplanted hepatomas of the 14th to 19th generations were used for ultrastructural localization of AFP. Various methods of tissue processing were examined under the light and electron microscopes for intracellular detection of AFP by use of specific anti-AFP antibodies conjugated with peroxidase. AFP was localized in the perinuclear space, the rough-surfaced endoplasmic reticulum and the Golgi apparatus.