Group B beta-hemolytic Streptococcus (GBS) is a major pathogen affecting newborns. We have investigated the molecular mechanism underlying the respiratory distress induced in sheep after intravenous injection of a toxin produced by this organism. The pathophysiological response is characterized by pulmonary hypertension, followed by granulocytopenia and increased pulmonary vascular permeability to protein. 31P NMR studies of GBS toxin and model components before and after reductive alkaline hydrolysis demonstrated that phosphodiester residues are an integral part of the GBS toxin. Reductive alkaline treatment cleaves phosphate esters from secondary and primary alcohols and renders GBS toxin nontoxic in the sheep model and inactive as a mediator of elastase release in vitro from isolated human granulocytes. We propose that the interaction of cellular receptors with mannosyl phosphodiester groups plays an essential role in the pathophysiological response to GBS toxin.