Ultrastructural and cytochemical features of phagosome degradation were examined in the tapetal retinal pigment epithelium (RPE) of the opossum. Didelphis virginiana. The tapetal RPE cells of the opossum measure as much as 100 micrometers in thickness, and the phagosomes traverse these cells so as to occupy a narrow region along the basal border. Both ultrastructural and cytochemical observations showed that degradation of phagosomes by lysosomes occurs only in this basal region. Acid phosphatase activity was present only in the basal RPE, where phagosomes appeared degraded and were observed to interact with each other and with lysosomes. Phagosomes in the apical and mid-RPE always had two membranes surrounding the discs and were acid phosphatase negative. Ultrastructural changes, which may occur in the absence of lysosomal enzymes, were examined in phagosomes that were, on the basis of several criteria, undegraded. These changes were accentuated in phagosomes trapped in the apical RPE by colchicine.