The possible biochemical mechanisms of varietal and species specificity of obligate fungal parasites are considered in relation to the established genetics and biochemistry of host-parasite systems. The two general theories of specificity which have been put forward are identified. One invokes the induction of successful pathogenesis as a primary determinant in specificity while the other predicts that recognition of avirulent pathogens by the host leads to induced resistance which acts as the determinant in specificity. The former theory is supported by evidence for the appearance of novel host enzymes during disease development. The latter is supported by observations of host gene derepression and phytoalexin accumulation which occur in resistance responses at times prior to any significant response in susceptible combinations. These theories are examined experimentally in the flax/flax rust system. The molecular origin of ribonuclease with altered catalytic properties, which arises during disease development, is examined. Rigorous purification reveals that the altered catalytic properties can be accounted for by altered proportions of ribonuclease I isozymes. These changes are similar during resistant and susceptible reactions until sporulation occurs. Induced resistance is characterized and compared to primary changes during susceptibility through a detailed study of RNA and protein synthesis. Enhanced RNA synthesis occurs in the resistant reaction at times prior to any measurable response in the susceptible combination, although both combinations exhibit higher rates of RNA synthesis at later times. RNA was fractionated by electrophoresis and affinity chromatography and messenger activity assessed by in vitro translation. Enhanced RNA synthesis is characterized by decreased messenger polyadenylation. However, polyadenylated and non-polyadenylated messenger RNA were shown to encode many common polypeptides; this provides an explanation for the fact that few changes in iri vivo protein synthesis can be detected by one or two dimensional electrophoresis. The only marked changes in protein synthesis occur in the susceptible combination and include a dramatic decline in the synthesis of the large subunit of ribulose-1,5-bisphosphate carboxylase. It is concluded that incompatibility of an avirulent race of rust with the flax variety Bombay is determined by induced resistance resulting from recognition of the avirulent pathogen prior to the initiation of pathogenesis. However, specific biochemical events in the host, particularly those involving chloroplast function, may be necessary for successful pathogen development.