Summary 1. Sixteen rabbits were subjected to fractures of the femur. Eight of these were under treatment with cortisone. 2. One control and one treated animal were sacrificed serially for eight days following fracture. 3. Gross healing of the fracture and absorption of the hematoma were greatly delayed in the animals receiving cortisone. 4. Histologically, the chief differences were seen following the fourth post-fracture day when retardation of all phases of healing were noted in the cortisone-treated animals. At the fourth day, new blood vessels began to appear in both control and cortisone-treated rabbits, but were more numerous in the control animals. 5. Failure of connective tissue regeneration following the fourth post-fracture day in the cortisone-treated rabbits may have been the result of poor tissue nutrition due to an inadequate blood supply or may have been due to the action of a circulating material possibly cortisone itself, brought to the area through new vessels.