Several strains of bacteriophage have been isolated that induce the formation of a polysaccharide hydrolase after infection of Klebsiella aerogenes type 54 [A3(S1)]. The action of this enzyme on polysaccharide solutions was to decrease their viscosity and increase their reducing value. These effects were associated with the release of two oligosaccharides (O1 and O2) from the polysaccharide. These two substances are not identical with any of the four oligosaccharides isolated from autohydrolysates. The two enzymically isolated fractions have been tentatively identified as tetrasaccharides, and oligosaccharide O2 is probably an acetylated version of oligosaccharide O1. This latter oligosaccharide differs in some way, still unknown, from the tetrasaccharide cellobiosylglucuronosylfucose found in acid hydrolysates of the slime polysaccharide. The enzyme is limited in its activity to the polysaccharide excreted by the A3 strain of K. aerogenes type 54 or by similar strains. It is also active on the polysaccharides altered by acid or alkaline treatment. The enzyme has optimum activity at pH6.5. A study of the products released by enzyme action has shown it to be a fucosidase splitting the fucosylglucose linkages found in the intact polysaccharide.