The activity of glucan synthetase increased dramatically during encystment of Polysphondylium pallidum cells. The majority of activity was present in purified plasma membranes. Activity, measured as glucose incorporation from UDPG into NaOH-insoluble glucan, increased 30-40 fold in the membranes. Increases in activity within the cells preceded plasma membrane increases and the enzyme appeared to be rapidly transported to the plasma membrane. Intracellular activity was relatively low. When cells were incubated with UDPG and when phloretin was included to inhibit glucose uptake, no NaOH-insoluble glucan was synthesized. Hence, the UDPG-binding site was not exposed at the cell-surface. When the NaOH-insoluble glucan was digested with endo-β-1,4-glucanase the products were cellobiose and glucose. The glucan could also be precipitated from Schweizer's reagent with acetic acid. These results suggest that the glucan contained predominantly β-1,4-linkages and may be cellulose. Experiments with cycloheximide confirmed that protein synthesis was required for encystment. Labeling of cells with [1-(14)C]-acetate showed that the synthesis of certain plasma membrane proteins was developmentally regulated. A number of proteins (e.g., myosin heavy chains and actin) were synthesized during the lag phase and their synthesis was subsequently reduced or ceased altogether. Immediately prior to the commencement of cyst wall formation seven new plasma membrane proteins were synthesized. These proteins were not detected intracellularly, indicating rapid transfer to the plasma membrane. The possible relationship between the seven developmentally regulated proteins and a postulated "multi-enzyme-complex" involved in cellulose synthesis is discussed. Their synthesis may be related to the increase in particles in the outer leaflet of the plasma membrane observed during encystment with freeze-etching (G.W. Erdos and H.R. Hohl, 1980, Cytobios, 29, 7-16).