Numerous studies have suggested that cryptococcal capsular polysaccharide could induce an immunological paralysis. To investigate this possibility, mice were given various concentrations of purified cryptococcal polysaccharide and then 14 days later were challenge-immunized with the same material in Freund's incomplete adjuvant. Anticryptococcal agglutinin titers were determined at various periods after polysaccharide treatment and after challenge immunization. At the same periods the hemolytic plaque technique was used to determine the number of spleen cells capable of producing antibody against cryptococcal polysaccharide. The data indicated that there was a transitory immune response which preceded tolerance induction. In animals given the largest doses of polysaccharide, "in vivo" neutralization was responsible for low serum agglutinin titers during the transitory response. The capsular polysaccharide was considered to have induced immunological unresponsiveness at the highest concentration, because challenge immunization did not stimulate an increase in the number of plaque-forming cells (PFC). A sixfold increase in numbers of PFC was found in animals injected initially with the lowest concentration of polysaccharide. These results support the idea that tolerance was due to terminal differentiation without proliferation of the immunocompetent cells. The central failure of the immune mechanism which was apparent in the paralyzed mice was temporary under the conditions of this experiment.