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The developmental differentiation of the hypothalamo-hypophyseal system and its disposition in the adult normal minnow is described. Neurosecretory stainable material is present either as granules or droplets in the nucleus preopticus and it is suggested that they are related with one another and follow a sequence in their developmental appearance. This differentiation of the neuorsecretory material and its distribution along the preoptico-hypophyseal tract suggests a strong basis in support of the “transport-hypothesis” of Bargmann and Scharrer ('51). The presences of the Herring bodies and peripheral movement of the neurosecretory material along the axon is suggestive of the functional role performed by the tract in the process of storage and release of hormone into the circulation. The presence of intrathalamic branches of the optic nerve and their close association with neurosecretory fibers of the tract seem to be of significance in the important problem of retina-pituitary relationship. Injections of synthetic oxytocin, synthetic lysine vasopressin and a suspension of acetone-dried hypothalmus containing nucleus preopticus and the neurosecretory material have no effect on the color response in the minnow. The effect of hypophysectomy clearly confirms that the axons of the nucleus preopticus pass down to the neurohypophysis. After severe operational interruptions of the fibers, their trophic centers (the cell bodies of the nucleus preopticus) degenerate. The accumulation of the neurosecretory material in the stalk region after hypophysectomy supports the “transport-hypothesis.”