Exogenous edeine inhibits the synthesis of DNA and protein, but not that of RNA, in extracts of edeine-producing Bacillus brevis Vm 4 cells. This is analogous to the effect of edeine on extracts obtained from edeine-sensitive cells. 2. Producer cells, in contrast to sensitive ones, are not permeable to exogenous edeine. DNA synthesis in producer cells rendered permeable by toluene treatment becomes sensitive to edeine. 3. No free edeine could be detected in post-log producer cells during maximal synthesis of edeine. Nascent edeine exists in the cell in a biologically inactive form, bound to a fast-sedimenting fraction. Edeine B, identical to the antibiotic present in the medium, is released from this fraction by mild treatment with alkali.