1. The relationship of sucrose and water concentration to invertase activity in vivo and in vitro has been studied under the same environmental conditions.
2. The sucroclastic activity of S. cerevisiae cells and of invertase solutions prepared from them reacts to changes in sucrose and water concentration in an identical manner.
3. The invertase contained in living yeast cells is just as freely exposed to the conditions of sucrose and water concentrations of the suspending medium as it would be if it were contained in a cell-free solution. Weight is added to the previous suggestion (2) that yeast invertase exerts its physiological activity in a region quite close to the surface of the cell.