In order to ascertain the factors controlling conversion of Coccidioides immitis arthroconidia to endosporulating spherules, studies were conducted with the use of subcutaneously implanted dialysis chambers in mice. The dialysate had the following characteristics: pH, ∼7.36; CO₂ partial pressure, ∼50 mm Hg; O₂ partial pressure, ∼140 mm Hg; protein content, ∼20 mg/ml; and no cells. When chambers were inoculated with arthroconidia, endosporulating spherules developed. Introduction of syngeneic phagocytes had no effect. When dialysate or autologous serum was studied in vitro in room air, arthroconidia converted to mycelia unless CO₂ supplementation (CO₂ partial pressure, 20–80 mm Hg) was provided, in which case endosporulating spherules developed. The effect of CO₂ could not be reproduced with either NaHCO₃ or other buffers. These studies indicate that CO₂ at a partial pressure found in normal host tissues is essential for formation of endosporulating spherules and that host phagocytes are not needed for such conversion in tissue fluids, either in vivo or in vitro.