Rolling disease has been produced and studied in rats and mice, using the exotoxin of the A strain of Mycoplasma neurolyticum. The primary lesion of the brain consists of spongiform degeneration, associated with vesicle formation in the cortex and underlying white matter of the cerebral hemispheres, and in the molecular layer of the cerebellum. The brains of animals surviving 2 days or longer show extensive necrotizing lesions resembling ischemic necrosis, in both cerebral hemispheres. The brains of rats and mice with rolling disease become deeply stained by intraperitoneally injected trypan blue, indicating early disruption of the blood brain barrier. The toxin appears to be a thermolabile protein with a molecular weight exceeding 200,000. It is only active when injected by vein, and causes no disease when injected intracerebrally, intraperitoneally or subcutaneously, suggesting the existence of specific receptors within the vascular bed of the central nervous system. Protection is afforded by rabbit antibody against the toxin, but only when antibody is injected within less than 3 min after intravenous injection of toxin, indicating rapid fixation to receptors in the brain. The toxin is inactivated by incubation for 10 min at 37 degrees C with suspensions of the sedimentable component of normal brain. The inactivating factor in brain sediment is very thermostable, not affected by trypsin, and eliminated by treatment with periodate. Similar inactivation of toxin is demonstrable with water-soluble gangliosides of brain. A theoretical concept to explain the action of the toxin is proposed.