Rose and Rose (1941, Physiol. Zool. 14: 323) found that adult hydranths of the marine hydroid, Tubularia crocea, agitated in sea water produced a solution inhibitor water, which prevented the regeneration of freshly-cut stem lengths. They and subsequent workers ascribed to this inhibitor a role in normal physiological dominance. It has now been found that considerable bacterial growth occurs during the preparation of inhibitor water by the usual methods. When antibiotics have been added to maintain bacterio-stasis no inhibitor can be collected. Experiments exclude the possibilities that the antibiotics prevent the production of the inhibitor, or destroy it as it is produced, show and that the metabolites produced by bacterial growth in the absence of hydranths inhibit regeneration. The conclusion is that inhibitor water represents the by-products of bacterial growth for which the hydranths serve as source of inoculum and as nutritive medium.