When serially cultivated human epidermal keratinocytes are placed in suspension culture they stop growing and form, beneath the plasma membrane, an insoluble envelope consisting of protein cross-linked by epsilon- (gamma-glutamyl)lysine. The formation of envelopes in suspended cells is preceded by a sharp decline in the rate of protein synthesis, and most envelopes appear only after the average rate of protein synthesis has fallen to a very low level. If protein synthesis is reduced over 98 percent with cycloheximide or emetine at the time that surface-grown cells are placed in suspension culture, cross-linked envelopes form in most of the cells. This shows that the precursor of the envelope and the cross-linking enzyme are already in the cytoplasm in most cells of growing surface cultures. The process of envelope formation by suspension cultures is actually accelerated by the inhibitors of protein synthesis; an increased number of cells with cross-linked envelopes is observable within 4-6 h after the addition of cycloheximide. The inhibitor also induces a large fraction of the cells of surface cultures to form enveloped within a few days. These findings suggest that arrest of protein synthesis leads to activation of the cross-linking process. Agents known to inhibit transglutaminase-mediated protein cross-linking-putrescine, iodoacetamide, and ethylene glycol-bis(beta-aminoethyl ether)N,N,N',N'-tetraacetate (EGTA)- also prevent envelope formation. Though the activity of the cross-linking transglutaminase depends on the presence of cellular Ca++, we have not been able to activate the cross-linking process by high external Ca++ concentration or ionophores.