Phagocytosis by polymorphonuclear leukocytes (PMN) is accompanied by specific morphological and metabolic events which may result in the killing of internalized micro-organism. Hydrogen peroxide is produced in increased amounts during phagocytosis (17) and in combination with myeloperoxidase and halide ions constitute a potent, microbicidal mechanism (8,9,11). There can be direct iodination of micro-organisms (10), or alternatively, other intermediate reaction products, i.e. chloramines and aldehydes (21), can exert a microbicidal effect. The H2O2-peroxidase-halide system is presumed to operate within the phagocytic vacuole (12,18). Myeloperoxidase, present in the primary granules of PMN, enters the phagocytic vacuole during degranulation (1,4,7), and halide ions are probably derived from the extracellular medium or are present in the PMN (see 11, 18). For the operation of this system in intact cells, the presence of H2O2 in the phagocytic vacuole is necessary, and indeed this has been suggested by the work of several investigators (12, 18, 21). In the present investigation, the diaminobenzidine reaction of Graham and Karnovsky (5), modified to utilize endogenous myeloperoxidase and hydrogen peroxide, has been applied to actively phagocytizing PMN to demonstrate cytochemically the presence of H2O2 in the phagocytic vacuole.