Spores of Myxobolus pendula develop within the cores of complex cysts on the gill arch of creek chub Semotilus atromaculatus. Adjacent to, and surrounding, the spores are concentric layers of stratified interdigitating cells, whose nature was examined by transmission electron microscopy and by immunohistochemical and molecular biological techniques. In situ hybridization data using parasite-derived ribosomal DNA as a probe indicate that infection leads to the encapsulation of developing plasmodia by host immune cells that form an epithelioid granuloma. Epithelioid cell–cell adhesion is effected by desmosomes anchored intracellularly to cytokeratin intermediate filaments. High levels of alkaline phosphatase activity are associated with regions of cellular interdigitation. The granuloma may serve to limit the spread of the parasite to surrounding tissues but does not appear to inhibit diffusion of oxygen and nutrients to the developing spores.