Endoplasmic reticulum (ER) was studied by fluorescence microscopy of living CV-1 cells treated with the fluorescent carbocyanine dye DiOC6(3). Using video recording and image processing techniques, several distinct forms of highly localized movements of ER were documented, categorized, and analyzed in terms of mechanism and structural implications. These include tubule branching, ring closure, and sliding. These localized movements have been observed to generate the basic elements of ER: linear tubules, polygonal reticulum, and triple junctions. We propose that as such they act as the mechanism for constructing the polygonal lattice of interconnected membrane tubules that constitutes ER. The nature of these movements suggests possible involvement of the cytoskeleton, and, in view of the close correlations in the distributions of ER and microtubules, and the accompanying paper (Dabora and Sheetz), it is possible that microtubules may play a role in generating ER motility and in constructing and maintaining the ER network in living cells.