Observations of the temperature, salinity, and density microstructure in the ocean and fresh water lakes are discussed and compared briefly with previous explanations. None of the present theories, based on the salt fingering process, large amplitude internal waves, and shear instability, is completely satisfactory. A new laboratory experiment which exhibits regularly spaced sharp density gradients is discussed in the light of its possible relevance to the layering observed in nature. The theoretical explanation of the layering observed in the laboratory is apparently the diffusive instability (viscous overturning) proposed by Mclntyre. The instability is produced by counter-gradients of angular momentum and density. A Richardson number-Prandtl number criterion is presented. For a given density gradient and ratio of viscosity to diffusivity, an increasing velocity gradient will lead to the layering mode. This suggests an observational test, perhaps most feasibly carried out in the Indian Ocean, which would study the microstructure as a function of surface wind strength and direction.