A saponin isolated from the Chinese herb zhi-mu (Anemarrhena asphodeloides Bunge) modifies alpha-fetoprotein production when injected into newborn rats. 2. The serum level of AFP was determined quantitatively by immunorocket electrophoresis. 3. AFP serum levels were reduced to 60% of the control by zhi-mu saponin (ZMS). 4. The lower AFP level in drug treated rat serum is not due to a change in the pattern of serum AFP variants. 5. AFP mRNA levels in ZMS-treated rat livers, measured by RNA dot hybridization, decreased to about 50% of control levels after 4 days treatment. 6. Results from tritium labeled dexamethasone competition assays suggest that ZMS may act on AFP gene expression through glucocorticoid receptor mediated action.