The development of auxospores and initial cells of the freshwater chain-forming diatom Ellerbeckia arenaria forma arenaria was studied using light and electron microscopy. Whether the auxospore mother cell is formed vegetatively (parthenogenesis) or through autogamy, is still a matter of speculation. Because no signs of spermiogenesis could be detected in our material, we exclude oogamy. Further development involves retraction of the protoplast from the epivalve and the formation of a featureless siliceous cap with a central opening on its free surface. The homology and function of this cap remains uncertain. At the other end of the cell the protoplast remains tightly attached to the hypovalve throughout its further development. This hypovalve always has a concave valve face. An organic wall bearing many layers of overlapping, small silica scales begins formation while the cell is still enclosed within the mother cell wall, and allows the auxospore to swell, thus breaking the siliceous cap and girdle bands. External and internal surfaces of scales can be distinguished morphologically. Initial valves are formed internal to the scales at an oblique angle to the parent chain. The initial epivalve always faces the hypotheca of the auxospore mother cell, and the initial valves already show elements of the heterovalvy manifest in the vegetative cells. The significance of the observations in terms of ecology and phylogeny is discussed. The combinations Ellerbeckia arenaria (Moore ex Ralfs) R. M. Crawford, and E. arenaria forma teres (Brun ex Schmidt) R. M. Crawford are validated.