1. Conditions which favor the formation and accumulation of peroxide in broth cultures of pneumococcus are free access of air, and the absence of catalase, peroxidase, and other catalysts capable of decomposing this compound. Under these favorable conditions peroxide becomes demonstrable in the culture fluid during the logarithmic phase of growth and persists for a period of at least 6 to 12 days. 2. In the absence of these favorable conditions the formation of peroxide is inhibited. In a culture with deficient oxygen exposure the accumulation of peroxide is delayed; when anaerobic conditions are maintained the substance is not formed. In the presence of active catalysts, peroxide does not accumulate in the medium in quantities sufficient to give a positive reaction. The accumulation of peroxide in pneumococcus cultures is dependent upon the balance between the amount produced by the microorganisms and the amount destroyed by substances in the medium. 3. The peroxide formed in pneumococcus cultures is unstable. It gradually disappears during prolonged incubation at 37 degrees C.; it is less stable in alkaline than in neutral or acid media. It is destroyed in culture filtrates exposed to the temperature of boiling water for 15 minutes, and to that of steam under pressure (15 pounds) for 10 minutes. 4. Peroxide formation occurred early in broth cultures of the seven strains of pneumococcus and of the six strains of non-hemolytic streptococci studied. Fifteen of twenty-three strains of Streptococcus haemolyticus and one of three strains of Streptococcus mucosus formed peroxide. In the positively reacting cultures of Streptococcus haemolyticus and Streptococcus mucosus the presence of peroxide was not demonstrable until the 3rd to 5th day of incubation. Peroxide could not be detected at any time during growth of the two strains of Staphylococcus aureus.