Ovariectomized mice were given estrogen and progesterone either independently, or simultaneously, or in sequence. Thymidine‐H³ was also injected, and the tissues were radioautographed. Analysis of modulation and differentiation was based on the morphological changes seen in cell populations identified by the presence or absence of radioactive nuclei. Estrogen induced cells newly formed in the basal layer to differentiate into a stratified squamous, keratinizing epithelium but did not convert the slowly proliferating surface cells. Progesterone accelerated basal cell proliferation, although this effect was expressed about a day later than when estrogen was used. When both hormones were used in succession, neither could do more than modify the appearance of the cells produced under the influence of the other hormone. However, either hormone could cause proliferation, migration and differentiation of cells from the same basal cells that had previously been the source of cells induced to differentiate by the other hormone. Therefore, the same basal cells can give rise to either stratified squamous or mucous epithelium. Shortly after cells leave the basal layer under the influence of one hormone they cannot be induced to follow the opposite path of differentiation by reversal of hormone treatment. That is, estrogen or progesterone can induce true differentiation as cells leave the basal layer, but only modulation above this level. Consequently, the initiation of relatively irreversible differentiation in this system is closely associated with the stage at which a cell is produced by mitosis from a less differentiated cell and does not appear related to obvious cytoplasmic differentiation.