The entocodon is to be regarded, therefore, not as primarily an ingrowth of ectoderm, but rather as an upgrowth of both body-layers, in the form of a circular rim (IVa), representing the umbrellar margin; it is comparable to the bulging that forms the umbrella in the direct method of budding, but takes place before a manubrium is formed, and is greatly reduced in size, so as to become a little pit. By a simple modification, the open pit becomes a solid ectodermal ingrowth, just as in Teleostean fishes the hollow medullary tube, or the auditory pit of other vertebrate embryos, is formed at first as a solid cord of cells, which acquires a cavity secondarily. Moreover, the entocodon, however developed, gives rise at first to a closed cavity, representing a closing over of the umbrella, temporary in the bud destined to be a free medusa, but usually permanent in the sessile gonophore. As has been shown above, the closing up of the sub-umbral cavity is one of the earliest degenerative changes in the evolution of the gonophore, and we may regard it as the umbrellar fold taking on a protective function, either temporarily for the bud or permanently for the gonophore. To sum up, the entocodon is a precocious formation of the umbrella, closing over to protect the organs in the umbrellar cavity. The possession of an entocodon proves the medusa-nature of the bud, and can only be explained on the theory that gonophores are degenerate medusae, and is inexplicable on the opposed view that medusae are derived from gonophores secondarily set free. In the sporosac, however, the medusa-individual has become so degenerate that even the documentary proof, so to speak, of its medusoid nature may have been destroyed, and only circumstantial evidence of its nature can be produced. 4. _Germinal Budding._--This method of budding is commonly described as budding from a single body-layer, instead of from both layers. The layer that produces the bud is invariably the ectoderm, i.e. the layer in which, in Hydromedusae, the generative cells are lodged; and in some cases the buds are produced in the exact spot in which later the gonads appear. From these facts, and from those of the sporogony, to be described below, we may regard budding to this type as taking place from the germinal epithelium rather than from ordinary ectoderm.