Phenotypic expression of resistance to Banzi virus infection by C3H/RV mice develops at about 4 weeks of age and occurs when the virus is given at a peripheral inoculation site. In contrast, young or adult congenic C3H/He mice die with an encephalitic illness regardless of the route of inoculation. Data are presented here which suggest that interfering virus (I.V.) production by mice genetically resistant to lethal flavivirus encephalitis may contribute to their survival. The level of I.V. in the brains of weanling C3H/RV mice was lower and I.V. was detected for a shorter period of time than in brains of adult resistant mice. After intracerebral inoculation of virus, to which the C3H/RV mice succumb, I.V. was not detected in the brain at any time after infection. Interfering virus production appeared to originate in cells of the lymphoreticular system with subsequent amplification in the central nervous system. Cyclophosphamide, an immunosuppressive drug which compromises resistance of C3H/RV mice to lethal Banzi virus infection, enhanced production of I.V. in the brains of resistant mice and stimulated I.V. production in the brains of susceptible C3H/He mice. It is hypothesized that I.V. is produced, initially, by a lymphoid cell type which is cyclophosphamide-resistant.