The origin and development of the demarcation membrane system (DMS) in rat megakaryocyte and the mechanism of platelet demarcation was studied by freeze-fracture technique (FF). Correlated with thin-sectioning electron microscopy, tangentially fractured DMS appear as sheets of fenestrated membranes within the megakaryocyte cytoplasm. The DMS is finely granular and contains membrane-associated particles (MAP). When DMS is fractured transversally, a canal system is disclosed, of which the basic elements are single tubules with an average width of 150 nm, containing the equilibrating substance and surrounded by a single membrane. Bead-like chains of these tubules are seen lying side by side and are interconnected by bridges formed by membrane attachments. These tubules are continuous with randomly distributed invaginations seen on the megakaryocyte plasma membrane (MPM). The continuity of the lumen of these tubules with the extracellular space was confirmed when lanthanum, an extracellular tracer, readily penetrated the tubules. Size distribution of MAP on platelet plasma membranes, DMS, and megakaryocyte plasma membranes indicated similarities suggesting a common origin. Based on these observations, we propose a model for the process of platelet demarcation and thrombocytogenesis. We propose that the DMS originates by invagination at multiple sites from the MPM. This results in the formation of tubules within the cytoplasm of megakaryocytes. These tubules may branch and then interconnect forming a continuous network of tubules. The next step is the formation of flat membranes from the membranes of these tubes. The tubes lie side by side, parallel in their long axes, with multiple points of fusion occurring between their membranes. Each tubule is in the process of becoming two hemicylinders, the edges of which are cojoined to the edges of the contiguous hemicylinders. The fused walls of parallel tubes may be visualized in the plane of their long axes as becoming a scalloped membrane, facing a similar membrane of corresponding hemicylinders. The two scalloped membranes can then come apart, each surrounding a volume of cytoplasm which is a prospective platelet.