Studies of cell mediated immunity (CMI) in atopic dermatitis have demonstrated various defects and frequently contradictory results. The true nature of immune dysfunction remains uncertain. We approached this question by concurrently examining two aspects of CMI: delayed cutaneous hypersensitivity and in vitro lymphocyte transformation. Responses were tested using the antigens Candida albicans and streptokinase-streptodornase (SKSD). Mean lymphocyte transformation was equal in atopic patients and controls, although a subgroup of severely dermatitic patients showed depressed responses. Cutaneous anergy was the rule in atopic patients (96% to candidin and 84% to SKSD). Although normal subjects showed good correlation between in vitro and cutaneous responses, atopic patients showed a significant lack of correlation. Many patients manifested cutaneous anergy in the face of normal lymphocyte transformation re sponses.