Changes taking place during cambial reactivation in Aesculus hippocastanum have been studied using transmission electron microscopy. Cytoplasmic activity in the form of vesicle production by dictyosomes and endoplasmic reticulum, and coated vesicle formation at the plasmalemma, was observed in samples collected in mid-Feb. The first cell divisions occurred 1 month later, in cells to the phloem side of the cambium, and were of two types: penclinal divisions producing new phloem precursors, and oblique anticlinal divisions in phloem mother cells formed at the end of the previous growing season producing putative companion cell/sieve element pairs. The fusiform initial was identified as the cell adjacent to the boundary-layer of parenchyma cells and was the last cell to divide, 2 weeks after the first divisions in phloem precursors. For the next 4 weeks phloem cells only were produced The first new differentiating xylem elements were formed in the middle of Apr., following a surge in the rate of cell division by the initial and its derivative xylem mother cells. These were a mixture of developing fibres and vessel elements. Some of the boundary-layer cells were converted directly to vessel elements without any division taking place, while others were derived from daughter cells of the fusiform initial produced following its reactivation. © 1992 Annals of Botany Company.