We discuss the formation of spectral features in the decelerating ejec
ta of gamma-ray bursts, including the possible effect of inhomogeneiti
es. These should lead to blueshifted and broadened absorption edges an
d resonant features, especially from H and He. An external neutral ISM
could produce detectable H and He, as well as Fe X-ray absorption edg
es and lines. Hypernova scenarios may be diagnosed by Fe K alpha and H
Ly alpha emission lines.