Formaldehyde is reduced to methyl alcohol by living cells of a creatinine-decomposing strain of Pseudomonas aeruginosa. The amount of HCHO taken up in 30 minutes by 3 x 10(10) cells of this organism is termed its reducing capacity. It was found to be 400 to 480 microg. The reaction takes place over wide pH and temperature ranges, is independent of the concentration of formaldehyde as long as the latter is not high enough to exert a toxic effect on the cell, but depends on the number of bacteria present. In cultures, 3 to 7 days old, there is a decline in reducing capacity without a proportionate decrease in the number of viable cells. On the other hand in cultures, 2 to 4 weeks old, the number of viable cells determines the amount of HCHO taken up. N/100 NaOH depresses the reducing capacity of the organism without affecting bacterial viability. Exposure of bacterial suspensions to temperatures of 46-52 degrees C. for 10 minutes causes a far more rapid decrease in the number of viable cells than in reducing capacity. Incubation of cellular suspensions with nutrient substances, which are able to support adequately the growth of the organism, for 30 minutes prior to the addition of HCHO, induces increases in reducing capacity. The uptake of HCHO by different microorganisms seems to be related to their gaseous and nutritional requirements. Strains of P. aeruginosa and P. fluorescens are predominantly aerobic, least fastidious in their nutritional requirements, most active against HCHO, and least susceptible to the action of aureomycin and chloromycetin. The potential significance of cellular reducing capacity is discussed.