In studying "hemorrhagic necrosis" of tumors produced by endotoxin, it was found that the serum of bacillus Calmette--Guerin (BCG)-infected mice treated with endotoxin contains a substance (tumor necrosis factor; TNF) which mimics the tumor necrotic action of endotoxin itself. TNF-positive serum is as effective as endotoxin itself in causing necrosis of the sarcoma Meth A and other transplanted tumors. A variety of tests indicate that TNF is not residual endotoxin, but a factor released from host cells, probably macrophages, by endotoxin. Corynebacteria and Zymosan, which like BCG induce hyperplasia of the reticulo-endothelial system, can substitute for BCG in priming mice for release of TNF by endotoxin. TNF is toxic in vitro for two neoplastic cell lines; it is not toxic for mouse embryo cultures. We propose that TNF mediates endotoxin-induced tumor necrosis, and that it may be responsible for the suppression of transformed cells by activated macrophages.