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The role of coated vesicles during the absorption of horseradish peroxidase was investigated in the epithelium of the rat vas deferens by electron microscopy and cytochemistry. Peroxidase was introduced into the vas lumen in vivo. Tissue was excised at selected intervals, fixed in formaldehyde-glutaraldehyde, sectioned without freezing, incubated in Karnovsky's medium, postfixed in OsO(4), and processed for electron microscopy. Some controls and peroxidase-perfused specimens were incubated with TPP,(1) GP, and CMP. Attention was focused on the Golgi complex, apical multivesicular bodies, and two populations of coated vesicles; large (> 1000 A) ones concentrated in the apical cytoplasm and small (<750 A) ones found primarily in the Golgi region. 10 min after peroxidase injection, the tracer is found adhering to the surface plasmalemma, concentrated in bristle-coated invaginations, and within large coated vesicles. After 20-45 min, it is present in large smooth vesicles, apical multivesicular bodies, and dense bodies. Peroxidase is not seen in small coated vesicles at any interval. Counts of small coated vesicles reveal that during peroxidase absorption they first increase in number in the Golgi region and later, in the apical cytoplasm. In both control and peroxidase-perfused specimens incubated with TPP, reaction product is seen in several Golgi cisternae and in small coated vesicles in the Golgi region. With GP, reaction product is seen in one to two Golgi cisternae, multivesicular bodies, dense bodies, and small coated vesicles present in the Golgi region or near multivesicular bodies. The results demonstrate that (a) this epithelium functions in the absorption of protein from the duct lumen, (b) large coated vesicles serve as heterophagosomes to transport absorbed protein to lysosomes, and (c) some small coated vesicles serve as primary lysosomes to transport hydrolytic enzymes from the Golgi complex to multivesicular bodies.