Twenty-four patients with severe progressive rheumatoid arthritis were randomly assigned to cyclophosphamide or placebo in a double-blind crossover trial. Eleven patients who completed 9 months on cyclophosphamide (average dose: 1.8 mg/kg/day) demonstrated significant decrease in painful joints, swollen joints, and morning stiffness and increase in grip strength when compared to 11 patients on placebo. After crossover, significant improvement was observed in patients switched to cyclophosphamide, and deterioration within 2 months was observed in most patients changed from drug to placebo. Serum immunoglobulins and rheumatoid factor titers decreased with cyclophosphamide but antibody response to Vi antigen was unaffected. Primary delayed immune response to 2,4-dinitrochlorobenzene was markedly depressed. Adverse effects were troublesome--hemorrhagic cystitis affected 4 patients and amenorrhea occurred in 3. Despite striking beneficial effect, cyclophosphamide should be prescribed cautiously and only in severe resistant cases of rheumatoid arthritis.