The spirochete Borrelia burgdorferi was unexpectedly found to be as susceptible to diacetyl chloramphenicol, the product of the enzyme chloramphenicol acetyltransferase, as it was to chloramphenicol itself. The susceptibilities of Escherichia coli and Bacillus subtilis, as well as that of B. burgdorferi, to diacetyl chloramphenicol were then assayed in different media. All three species were susceptible to diacetyl chloramphenicol when growth media were supplemented with rabbit serum or, to a lesser extent, human serum. Susceptibility of E. coli and B. subtilis to diacetyl chloramphenicol was not observed in the absence of serum, when horse serum was used, or when the rabbit or human serum was heated first. In the presence of 10% rabbit serum, a strain of E. coli bearing the chloramphenicol acetyltransferase (cat) gene had a fourfold-lower resistance to chloramphenicol than in the absence of serum. A plate bioassay for chloramphenicol activity showed the conversion by rabbit, mouse, and human sera but not bacterial cell extracts or heated serum of diacetyl chloramphenicol to an inhibitory compound. Deacetylation of acetyl chloramphenicol by serum components was demonstrated by using fluorescent substrates and thin-layer chromatography. These studies indicate that esterases of serum can convert diacetyl chloramphenicol back to an active antibiotic, and thus, in vitro findings may not accurately reflect the level of chloramphenicol resistance by cat-bearing bacteria in vivo.