Uterine specimens from fetal and postnatal heifers were examined by various types of microscopy to determine when the endometrium differentiated into caruncular and intercaruncular regions and changes in the cell types as the uterus developed. The luminal surface of the fetal uterus was formed into prominent pedunculated or mushroom-shaped nodules. Glandular development was first observed at about 250 days of gestation as short invaginations of the epithelium of the internodular surface adjacent to nodular stalks. The basal profile of each epithelial cell in the deeper portions of developing glands formed cytoplasmic processes which extended into the stroma. Between birth and 3 months of age there was a tremendous increase in the glandular epithelium. Concurrent thickening of the connective tissue component caused expansion of the nodular peduncle and a gradual flattening of the nodule until, by 1 year of age, only slight elevations remained, with a discrete caruncle visible on each. By following the development of the glandular component it was concluded that only the apical portion of each fetal nodule will develop into a caruncle and the sides of the nodule, together with the internodular portion, are destined to be the intercaruncular region.