Approximately 5% of Thelohania solenopsis - infected imagoes of all fire ant castes contain 1-5 large (200-350 um diameter), fragile "cysts" (Knell et al., 1977). Light microscopy revealed that mature cysts were assemblages of tightly packed octospores, sometimes mixed with zones of megaspores. Nosema-like spores and their empty envelopes occurred in the periphery of some immature cysts. Under electron microscopy, cysts appear to be hypertrophied adipocytes transformed by the parasites, each cyst presumably forming from a single cell. The production of cysts might be interpreted as a defensive reaction of a host organism sacrificing the infected cells to segregate the infection. Observed melanization of some cysts supports this hypothesis. On the other hand, a cyst may help protect spores from environmental hazards and provide a concentrated infectious dose, which might be beneficial for horizontal transmission of the microsporidium.