This paper attempts to clarify the nature of chemical sensitivity by proposing a theory of disease that unites the disparate clinical observations associated with the condition. Sensitivity to chemicals appears to be the consequence of a two-step process: loss of tolerance in susceptible persons following exposure to various toxicants, and subsequent triggering of symptoms by extremely small quantities of previously tolerated chemicals, drugs, foods, and food and drug combinations including caffeine and alcohol. Although chemical sensitivity may be the consequence of this process, a term that may more clearly describe the observed process is toxicant-induced loss of tolerance. Features of this yet-to-be-proven mechanism or theory of disease that affect the design of human exposure studies include the stimulatory and withdrawallike nature (resembling addiction) of symptoms reported by patients and masking. Masking, which may blunt or eliminate responses to chemical challenges, appears to have several components: apposition, which is the overlapping of the effects of closely timed exposures, acclimatization or habituation, and addiction. A number of human challenge studies in this area have concluded that there is no physiological basis for chemical sensitivity. However, these studies have failed to address the role of masking. To ensure reliable and reproducible responses to challenges, future studies in which subjects are evaluated in an environmental medical unit, a hospital-based facility in which background chemical exposures are reduced to the lowest levels practicable, may be necessary. A set of postulates is offered to determine whether there is a causal relationship between low-level chemical exposures and symptoms using an environmental medical unit.