Summary: Additional evidence is offered which indicates that toxoid formation is not the result of the direct action of free formaldehyde on the diphtheria toxin. Results are obtained which suggest that the formation of toxoid by the action of formaldehyde on diphtheria toxin may depend upon a compound resulting from the reaction between formaldehyde and the amino group in an amino acid. A possible method for making acceptable toxoid from lower grade diphtheria toxins is suggested.