Thallus organization is examined in Aspicilia californica Rosentreter, fruticose lichen known from several localities in central and southern California. The sprawling, terete thallus branches possess a dense central medulla of thickwalled, longitudinally oriented fungal cells. This central tissue emerges at branch apices to form a darkly pigmented fungal tip. Thallus development involves the apical extension of the tip to produce a fungal tissue over which a cylindrical algal layer and cortex will eventually be formed. Apical branches are initiated by furcation entirely within the fungal tip. Lateral branches, emerging from the lichenized thallus, arise as a divergent bundle of elongate fungal cells originating in the medulla. The photobiont appears to play no direct role in initiation of apical or lateral branches. It is concluded that thallus development in A. californica occurs with a relatively low degree of synchrony between mycobiont and photobiont growth, similar to the pattern observed in crustose lichens with prothallic growth. A rather similar type of thallus organization is observed in A. hispida, although in that species mycobiont growth and branch initiation appear to be somewhat more closely associated with algal cell proliferation. A squamulose Aspicilia from central Spain produces rhizomorphs that may sometimes become invested with an algal layer and cortex, resembling the thallus axes of A. californica.