Systemic administration of a single dose (300 mg/kg) of cyclophosphamide (Cy) induced the appearance of a population of suppressor cells in the bone marrow and spleens of mice. Suppressor cells were assayed by their capacity to inhibit the concanavalin A (Con A) blastogenesis or the mixed-lymphocyte response of normal mC57Bl/6 spleen cells. Cy-induced bone marrow (Cy-BM) suppressor cells were present as early as 4 days following Cy therapy and their activity gradually decreased over the next 2 weeks. Cy-induced splenic (Cy-Sp) suppressor cells were maximally present on Days 6 through 10 following Cy therapy. Studies were performed to characterize the suppressor cells of bone marrow obtained 4 days after Cy treatment and of normal bone marrow (N-BM). Some suppressor activity was present in normal bone marrow. N-BM suppressor cells resembled cells of the monocyte/macrophage lineage in that they were slightly adherent to Sephadex G-10, sensitive to l-leucine methyl ester (LME), and insensitive to treatment either with anti-T-cell antibody and complement or with anti-immunoglobulin antibody and complement. Their suppressive activity was abrogated by incubation with either indomethacin or catalase. Cy-BM suppressor cells were also resistant to treatment with anti-T-cell and anti-immunoglobulin antibody and complement but were not adherent to Sephadex G-10 and not sensitive to LME. Their suppressive activity was partially eliminated by indomethacin alone or in combination with catalase. We conclude that Cy chemotherapy induces the appearance of a population of immune suppressive cells and that these cells appear first in the bone marrow and subsequently in the spleen.