The development of the Kranz structure was investigated in leaves of $C_4$ Euphorbia maculata using electron microscopy, Four leaf stages, i.e., primordial, immature, young, and mature, were examined, based on the photosynthetic tissue that surrounded the veins. The examination revealed how cells differentiated into distinct bundle sheath cells (BSCs) and mesophyll cells (MCs). Specialization of the BSCs was invariably associated with the development of the veins as well as the MCs. Precursors for BSC and MC were recognizable fairly early, at the immature stage, according to their position and differential enlargement. Once these precursors were delimited from the procambial area, differentiation into each tell type occurred synchronously, in a coordinated manner, All cells enlarged as they were displaced from the Kranz precursor area, but the BSC precursors were initially larger and remained relatively larger than the other cell types throughout leaf development. The developmental changes sharply distinguished BSCs from the adjacent MCs at the onset of Kranz formation and continued until maturity, Chloroplast enlargement also occurred during cell displacement, but the rate of enlargement was greater in BSCs, resulting in larger chloroplasts at later stages. However, no significant structural differences were detected among the chloroplasts of BSC and MC in the early stages. Most of the specialized features appeared at the young-leaf stage; structural dimorphism became prominent at the later stages. This enhanced development of the BSC chloroplasts was correlated with asymmetric distribution of cellular components. In addition, the BSC formed thin primary pit fields with numerous plasmodesmata. Peripheral reticulum was present but generally was not conspicuous. We also discuss the characteristics of leaf anatomy and ultrastructure in E. maculata as they relate to the $C_4$ photosynthetic pathway,