Endotoxin was given to grey collie dogs to investigate the mechanism of cyclic hematopoiesis. Over prolonged periods of daily administration, low doses of endotoxin (0.1 microgram/kg/day) failed to change the cycling of blood neutrophils or reticulocytes. However, higher doses of endotoxin maintained at a plateau level (5 microgram/kg/day) eliminated the cyclic changes in neutrophils and stabilized the reticulocyte and platelet counts in the normal range. Administration of endotoxin at this dose also eliminated the cyclic marrow differential count fluctuations characteristic of this disease. We infer from these results that endotoxin ameliorates the cyclical changes in blood cell counts by regulating hematopoietic proliferative activity at the stem cell level.