1. A peptidoglycan preparation N-acetylated at about 30% of glucosamine residues was obtained by the treatment of the lysozyme-resistant cell wall paptidoglycan of Bacillus cereus with acetic anhydride at pH 7. Fractionation of dialyzable material resulting from lysozyme digestion of the glycan component of this peptidoglycan preparation yielded five oligosaccharides designated as S1 to S5 besides the disaccharide GlcNAc-MurAc. 2. Oligosaccharide S3, which accounted for about 30% of the disaccharide units recovered as disaccharides and oligosaccharides, was identified as GlcN-MurAc-GlcNAc-MurAc. Oligosaccharide S1, accounting for about 20% of the disaccharide units recovered, was characterized as GlcN-MurAc-GlcN-MurAc-GlcNAc-MurAc, while oligosaccharide S2, present in a smaller amount, as GlcNAc-MurAc-GlcN-MurAc-glcNAc-MurAc. Oligosaccharides S4, and S5, present in small amounts, were identified as GlcNAc-MurAc-GlcNAc-MurAc and MurAc-GlcNAc-MurAc, respectively. 3. Oligosaccharides S1, S3 and S5 proved to be completely insusceptible to lysozyme, whereas S2 was digsted by lysozyme to produce GlcNAc-MurAc and S3. S1 was found to act as a more potent inhibitor than S3 in lysozyme-catalyzed digestion of polysaccharides. 4. The results obtained show that the lysozyme-catalyzed hydrolysis of peptidoglycan oligosaccharides had an obligatory requirement for the N-acetyl group on the glucosamine residue located in subsite C in the enzyme-substrate complex.