When Escherichia coli organisms are suspended in distilled water and freeze-dried the maximum loss of viability does not occur during the drying process proper, but during the time of contact of the dried organisms with air between the primary and the secondary drying periods. By substituting other gases for air at this stage, it has been proven that oxygen is the active agent involved. The dried organisms which were exposed to different pressures of air and oxygen at different temperatures proved to be extremely sensitive to traces of oxygen, even at very low temperatures. The implications of this oxygen effect in connexion with existing freeze-drying procedures, as well as some preliminary kinetic experiments concerning the shape of the survival curve, are discussed.