The differentiation of nail matrix and fine structure of matrix cells were studied with light and electron microscope using specimens from nails of thumb finger in Korean fetuses 14 to 24 weeks old. Fetal nail matrix consisted of two horizontal layers, thicker ventral and thinner dorsal matrices, originating from invagination of epidermis in proximal nail field. Matrix being generally thicker in its distal region than the apex became gradually thickened with increase of the fetal age. Each matrix consisted of single layer of basal cells and multiple layers of squamous cells which are arranged close to and parallel to the central axis of the nail mairix. The process of keratinization of fetal nail matrix was noted to be occured concurrently in the ventral and dorsal matrices along the central axis of matrix toward distal and dorsal direction. Squamous cells became matured with accumulation of tonofilaments, increase of keratohyalin granules, discharge of membrane coating granules, and narrowing of intercellular spaces, thickening of plasma membrane and finally being transformed into horny cells of nail plate. Horny cells of nail plate filled with fibrous elements in the electron dense amorphous substance. These findings of keratinization process of fetal nail matrix appeared to be similar to those of keratinization in epidermis and inner root sheath of the hair. In the nail matrix, however, corresponding region to the keratogenous zone of growing hair follicle was not observed. Vacuolated squamous cells of nail matrix seen on light microscopy was considered to be artefactual product, but squamous cells with condensed small nuclei rarely found adjacent nail plate was considered to be one of the squamous cells with unknown function. Proximal end of nail plate was observed on dorsal surface of nail field distal to the proximal nail fold at 14 and 16 weeks old human embryos. Proximal prolongation of the proximal end of nail plate was occured with advancing fetal age and afterward 21 weeks nail plate invaded into nail matrix. Melanin granule containing cells and Merkel cells were present only on the basal layer of dorsal nail matirx.