Normal squamous epithelial cells readily undergo terminal differentiation in culture and are commonly used in differentiation studies. Several intracellular markers of squamous differentiation such as keratin, involucrin, transglutaminase and cholesterol sulfate have been well-studied and described by other workers. We have recently reported a surface membrane antigen in squamous carcinoma of the head and neck antigen in squamous carcinoma of the head and neck which is recognized by a murine monoclonal antibody SQMI. In this paper, we present our studies on the ultrastructural localization of SQMI antigen in cultured squamous epithelial cells using gold-labelled antibody. The cells studied included both normal and cancer cells at different degrees of differentiation. Under both transmission and scanning electron microscopy examination, the SQMI antigen was localized at the membrane surface of cultured cells, particularly at sites of cell-cell interdigitation. No association with desmosomal structure was observed in any of the specimens examined. There was however an association of SQMI antigen with microvilli of cell membrane. No non-specific cytoplasmic localization of SQMI antigen was observed. The intensity of SQM1 antigen revealed by gold-labelling appeared to have a positive correlation with the degree of differentiation of the cells in culture.