Tardigrades weighed during desiccation in high or low humidities show a short period of rapid transpiration followed by an abrupt decline in transpiration which virtually arrests water loss. The amount of water retained following this 'permeability slump' is greater at low rates of desiccation but the slump is not a metabolic phenomenon, being reproducible in dead or narcotised animals. Tardigrades rinsed in hot chloroform (62 degrees C) for 5 hr still show the characteristic permeability decline when desiccated in 80% RH. However, 25hr rinsing in hot chloroform apparently obliterates the slump. Estimates of the bound water content of tardigrades by DSC show that this can account for the dehydrated masses of these chloroform-rinsed animals and that all free water is probably transpired. Lipid analysis of the 25 hr chloroform extracts by GC-MS reveals several lipid classes, predominantly free fatty acids (C(12)-C(18)); these are not detectable in the 5 hr extracts. Control rinsing in hot water has no apparent effect on the permeability slump. TEM tracer studies with lanthanum show the lipid-rich intracuticle to serve as a transpiration barrier in dehydrated animals but not in fully hydrated specimens. There is thus strong support for the role of intracuticular lipids in effecting the permeability slump. A model to explain this phenomenon on the basis of lipid phase changes is postulated.