Eighteen strains of Staph. pyogenes (nine penicillin-sensitive and nine penicillin-destroying) were passaged 40 to 50 times on Celbenin1 ditch plates. All strains developed an increase in resistance to Celbenin and eight strains (four penicillin-sensitive and four penicillin-destroying) were able to grow in 100 μg/ml. or more Celbenin. Resistance was of the drug-tolerant type and none of the cultures inactivated Celbenin. There was an associated increase in tolerance to benzyl penicillin. The highly Celbenin-resistant cultures isolated from penicillin-destroying staphylococci were in sharp contrast to those from penicillin-sensitive strains, as well as to penicillin G-tolerant staphylococci isolated in vitro, because they retained the cultural characteristics, coagulase and haemolytic activity, and mouse virulence of the parent strains, and the degree of resistance remained stable after repeated passage in the absence of Celbenin. Three naturally occurring Celbenin-resistant strains of Staph. pyogenes isolated from infective processes were also studied. All three strains grew luxuriantly in concentrations of Celbenin up to 12·5 μg/ml. but very poorly in higher concentrations. The possible significance of these findings is discussed.