Hypocotyls of Fraser fir (Abies fraseri (Pursh) Poir.) were excised from seeds germination 9 days and placed on bud induction medium containing 10 mg/liter benzyladenine (BA) and 0.01 mg/liter naphthaleneacetic acid (NAA) or medium without growth regulators. After 3 days on medium containing growth regulators, cell divisions were localized in epidermal and subepidermal layers of the hypocotyl while similar cell divisions were not observed in control-treated hypocotyls. Cell clusters consisting of two to five cells were present after 7 days in hypocotyls placed on bud induction medium. In control-treated hypocotyls, stomata continued to develop and cells within the cortex became vacuolated during the first 2 weeks in culture. All hypocotyls were transferred to secondary medium after 3 weeks. Cell clusters continued to enlarge into meristemoids in hypocotyls initially placed on bud induction medium. Gradually, meristemoids developed into buds and cataphylls were observed covering bud meristems.