The effect of various schedules for inducing tolerance to bacterial endotoxin in donor rabbits upon suitability for demonstration of passive transfer of tolerance to pyrogenicity in normal recipients has been investigated. Long-term treatment of donors, through 5 weeks, is no more effective than a brief series of injections, adding further evidence that tolerance is not attributable to specific antibody to the endotoxin. Qualitative differentiation of the febrile pattern of passively tolerant recipients from that seen in control animals depends upon the magnitude of the test dose of pyrogen. Passively tolerant rabbits respond to endotoxin with an acute leucopenia equivalent to that seen in controls suffering a full biphasic fever. Animals given daily injections of endotoxin continue to show the acute leucopenia, despite the early modification of the course of fever characteristic of endotoxin tolerance. The assumption that the leucopenia reflects damage to the leucocytes, with release of endogenous pyrogen, is not consistent with these findings. Rabbits rendered leucopenic by nitrogen mustard and then given endotoxin exhibit a rapidly developing fever of greater than normal intensity, the exaggeration of the febrile response being proportional to the severity of the induced leucopenia. The implications of these findings for the pathogenesis of endotoxin-induced fever are discussed. The evidence supports the hypothesis that endotoxin produces fever by direct action rather than by release of endogenous leucocytic pyrogen. It is postulated that the lesser fever, in animals having normal numbers of circulating leucocytes, reflects a limitation of available endotoxin by the known rapid sequestration in the white blood cells at the time of the acute leucopenia. It is further suggested that the biphasic febrile response of the normal rabbit results from reinoculation of the blood stream by the temporarily sequestered endotoxin, the RES of the tolerant animal clearing the released endotoxin at a rate sufficient to prevent triggering the second phase of fever.