Sheep erythrocyte ghosts released water-soluble organic phosphorus when treated with purified beta-hemolysin. Phospholipid analysis demonstrated that sphingomyelin accounted for 53% of the phospholipids present in sheep erythrocytes. Purified beta-hemolysin showed phospholipase C activity when purified ox brain or sheep erythrocyte sphingomyelin was used as substrate. Such studies have also revealed that the disappearance of sphingomyelin from the reaction mixture was accompanied by a comparable increase in the concentration of phosphoryl choline. Thin-layer chromatography of phospholipids, extracted from sheep erythrocytes which had been exposed to beta-hemolysin, demonstrated that sphingomyelin was rapidly degraded. Activators of beta-hemolysin, such as Mg(++), enhanced the release of organic phosphorus from erythrocyte ghosts and from sphingomyelin. Inhibitors of beta-hemolysin, such as ethylenediaminetetraacetic acid, p-chloromercuribenzoate, and iodoacetamide, also inhibited the release of organic phosphorus from erythrocyte ghosts and from sphingomyelin. These studies strongly suggested that beta-hemolysin enzymatically degraded the sphingomyelin of the erythrocyte membrane. Such degradation probably resulted in the eventual lysis of the erythrocyte.