Species of the genera Bacillus and Enterobacter isolated from the air of Lancashire cotton mills have been tested in tissue culture for the production of cytotoxic effect. Preliminary results show that many species of Bacillus and some species of Enterobacter produce water soluble toxins; in some cases a reversible effect has been observed after prolonged incubation. Attempts are being made to identify the toxins. Properties already demonstrated suggest that these toxins are different from the lipopolysaccharide endotoxin of Ent. agglomerans.