Summary Vero cells were persistently infected with canine distemper virus by continuous undiluted passage of virus harvests. The cells were refractory to superinfection by both measles virus and canine distemper virus. These persistently infected cells produced and released into the medium a labile component which had a potent and selective inhibitory effect on the replication of canine distemper and measles virus. The inhibitory agent was not inactivated by u.v.-irradiation or sedimented by ultracentrifugation. Antisera against canine distemper virus or SSPE sera were able to block this inhibitory effect. We propose that these persistently infected cells produce an excess of a virus-induced regulatory protein.