A staphylococcus was isolated from milk which is hemolytic with horse blood only in the presence of fat. Similar results were obtained with two other strains of staphylococci. The hemolysis is the result of the action of a fatty acid (or soap) upon the red blood cells. The fatty acid is formed by the action of a lipase elaborated by the staphylococcus. The corpuscles of different animals show slight variations in the ease with which they are hemolyzed by the staphylococcus. Attention is called to the desirability of testing for lipases in the study of staphylococci or of hemolysis.