1. The production of penicillin N and cephalosporin C by two mutants of a Cephalosporium sp. has been studied with cultures grown in a chemically defined medium and with suspensions of washed mycelium in water or a buffered salt solution. 2. Antibiotic synthesis began at an early stage of growth and its rate per unit weight of mycelium appeared to pass its maximum as morphological changes were occurring in young hyphae. This rate subsequently declined, but rapid production could continue after net growth had ceased. 3. In a series of shake-flask fermentations in the growth medium, increases in the yield of penicillin N above the mean were correlated with much smaller increases in the yield of cephalosporin C and vice versa. 4. In suspensions of washed mycelium, moderate decreases in the efficiency of aeration increased the yield of penicillin N and decreased that of cephalosporin C. A similar result normally followed the addition of methionine to the suspension fluid, and in both cases there was usually an increase in the yield of the two antibiotics combined. 5. The apparent intracellular concentrations of the antibiotics were much lower than those attained extracellularly and also much lower than those of most of the amino acids in the intracellular pool. No detectable amount of [(14)C]penicillin N added to the extracellular fluid was found to enter the mycelium. 6. Very small amounts of peptide material whose behaviour was similar to that of the sulphonic acid of delta-(alpha-amino-adipoyl)cysteinylvaline on paper electrophoresis at pH1.8 were found in extracts of the mycelium that had been oxidized with performic acid. 6-Aminopenicillanic acid and 7-aminocephalosporanic acid were not detected. 7. Ultrasonic treatment of the mycelium resulted in rapid fragmentation of mycelial chains, rupture of many individual cells, and the liberation of amino acids and other substances into the medium. 8. Ultrasonically treated preparations synthesized penicillin N and cephalosporin C rapidly after a lag of 12hr. Antibiotic synthesis was accompanied by the growth of hyphae from swollen mycelial fragments and by the re-establishment of permeability barriers resulting in the uptake of amino acids from the medium.
