A new colon carcinoma cell line (LIM1863) has been characterized. This cell line is unique in that the culture consists of organoids which are morphologically and functionally organized. Histological studies of the organoids show that the cells are arranged around a central lumen and the nuclei are polarized to the periphery. Two major morphological types are present: a columnar cell with a polarized, structurally normal brush border and goblet cells. The cells are also functionally mature and express the brush border enzymes aminopeptidase N, dipeptidyl peptidase IV, alkaline phosphatase, and sucrase-isomaltase. These enzymes are localized to the luminal membrane and the apical cytoplasm (of some cells). The goblet cells contain mucus and this mucus is secreted into the lumen. This functional differentiation suggests that the organoids contain precursor cells capable of differentiating along both the columnar and goblet cell pathways. At present no endocrine cells have been detected by morphological or histochemical analysis. The organoids have been in continuous culture with regular passaging for 21 months and also grow and differentiate normally in serum-free medium.