Lymphoid follicles cluster in the terminal rectum of various animal species and of man and hence this site may be important in the development of immune responses to pathogens. For the induction of immune responses at mucosal sites, interplay is required between various cell types performing functions ranging from antigen-sampling cells via antigen-presenting cells to antigen-specific lymphocytes. Therefore, we have characterised the cell populations and relevant functioning of follicle-associated epithelium (FAE) and associated follicles in the terminal portion of rectum in cattle as a representative mammal. Immunohistochemical studies of this region identified immune cell subsets (CD4+, CD8+, WC 1+gammadelta, CD2+, CD 21+ and CD 40+ cells) characteristic of an immune-inductive site. Examination of FAE identified a subset of cells with structural and functional features of antigen-sampling M-cells. Cells of the FAE and adjacent follicle-associated crypts expressed vimentin and a subset of these cells internalised microparticles, a further attribute of M-cells. The FAE cells were phenotypically heterogeneous and therefore the function and phenotype of these cell subsets requires further characterisation, particularly with respect to their potentially important role in the interaction of hosts with pathogens and the development of immune responses.