The effect of endotoxin on the tibial in vitro colony-forming cell (CFC) and the differentiated granulocyte compartment was evaluated. The injection of 5 µg of Salmonella typhosa endotoxin into CF1 mice leads to elevated serum colony-stimulating factor (CSF) levels along with a transient granulocytopenia followed by the release of granulocytes from the marrow. The present study demonstrates that the number of tibial CFC, as assayed on soft agar, decreases within 20 min after endotoxin, reaches a nadir at 6 hr (65.8 ± 4.9% of control), and then returns to control values by 48 hr. Concomitantly, over the 48 hr after endotoxin, there are sequential increases in the marrow myeloblast-promyelocyte compartment (MPC), myelocyte compartment (MC), and the PMN compartment. Radioautographic studies utilizing 3HTdR showed increased labeling indices and grain counts in the MPC and MC at 24 or 48 hr after endotoxin, indicating a shortening of generation time and perhaps of the DNA synthetic period in these compartments. The present data suggest that elevated CSF levels seen after endotoxin administration may lead to differentiation of the marrow CFC into the granulocyte pathway. There are also changes in the differentiated granulocyte compartment, suggesting a decreased generation time that may be due to CSF or a separate regulator such as antichalone.