1. In empyema fluids resulting from infection with pneumococci there are present large amounts of soluble substances which have the property of neutralizing pneumococcus antibodies. 2. Similar substances are found in the blood of infected rabbits. 3. When immune serum is injected into infected rabbits the immune substances disappear very quickly, and therefore are prevented from activity in overcoming the infection. 4. When immune serum is administered to patients severely infected with pneumococci, the immune bodies may also disappear very rapidly, and this disappearance is probably associated with the presence of such soluble substances in the blood. 5. The serum only becomes effective when these substances are neutralized. 6. The study of agglutination curves is of value in showing why in certain instances favorable results have not followed the use of immune serum. 7. It is important that in severely injected patients the serum be administered early in the disease and that the initial dosage be large.