Rats given a single intraperitoneal injection of an aqueous suspension of peptidoglycan-polysaccharide polymers derived from group A streptococcal cell wall (PG-APS) develop a severe, chronic, erosive arthritis which resembles human rheumatoid arthritis. The treatment of PG-APS-injected rats with a single intravenous injection of 0.4 mg of mutanolysin prevents the development of chronic arthritis, even when administration of the enzyme is delayed until severe acute arthritis has developed. PG-APS activates complement both in vitro and in vivo. Digestion of PG-APS with mutanolysin in vitro destroys the ability to activate both the alternate and classical pathways of human serum complement, and the loss of complement activation parallels the extent of PG-APS degradation. There is also a reduction in the in vivo complexing of C3 with PG-APS in the limbs of PG-APS-injected rats treated with mutanolysin, compared to control rats injected with PG-APS and treated with phosphate-buffered saline. This association between loss of arthropathic activity and loss of activation of complement is consistent with the hypothesis that activated complement products form a part of the inflammatory mediators involved in the acute and chronic phases of bacterial cell wall-induced arthritis. This may also partially explain how mutanolysin treatment alleviates cell wall-induced arthritis in the rat.