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SUMMARY: A latent, non-specific phosphatase of Hartmannella castellanii with an optimum pH of 4·0 has been investigated. The latency could be released in cell-free homogenates by treatment with Triton x 100, freezing and thawing, refrigeration or carbon tetrachloride. It seems likely that this enzyme is attached to a sub-cellular organelle as it was largely sedimentable when homogenates were prepared in media containing sucrose. During encystation of the amoebae under controlled conditions there was no appreciable change in the levels of total phosphatase activity measured in frozen-thawed extracts, but there were quite large increases in free activities of fresh, unfrozen preparations. Inhibitors and promoters of encystation were also found to affect the levels of phosphatase activity in the amoebae but did not affect its sedimentability which persisted throughout the initial degradative phase of encystment. Incubation of homogenates of Hartmannella decreased the latency of the acid phosphatase but this activation could be modified by substances which are known to affect the encystation responses of the amoebae. It is concluded that the degradative phase of encystation is due to the activation of hydrolytic enzymes within sedimentable compartments of the amoebae and is not the result of hydrolases being released from these compartments. It seems likely that agents which are capable of promoting encystation may do so by inducing activation of lysosomal enzymes.