Interferons are a group of inducible proteins with antiviral, anticancer and immunomodulatory activities. Difficulties involved in the production and purification of large quantities of interferon prevented their clinical use in man, and prompted investigations into the possible use of interferon inducers in man. The advent of DNA recombinant technology has largely overcome this problem with large quantities of pure recombinant interferon now being available, however, the successful use of these recombinant interferons in man will be delayed until the biological properties of each type of interferon are unravelled. The use of interferon inducers in man therefore could have practical advantages over the use of preparations of exogenous interferon. A naturally occurring ds RNA isolated and purified from a mycophage grown in Penicillium chrysoqenum has been shown to be a potent inducer of interferon. In view of the possible therapeutic use of ds RNA, toxicity studies were carried out with ds RNA in mice. Toxic side effects of ds RNA treatment include a reduction in nucleated bone marrow cell numbers and circulating lymphocyte numbers, a loss of lymphocytes from the thymus and severe mucosal damage to the ileum. Possible mechanisms of ds RNA induced toxicity are discussed. A more detailed investigation into the effect of ds RNA on mouse bone marrow indicated that ds RNA was toxic to both the stem cell population and the maturing/mature population of the bone marrow following administration to mice. Interferon was found to be toxic tog administration to mice. Interferon was found to be toxic to haemopoietic stem cells when incubated i£ vitro with mouse bone marrow cells, however, incubation of ds RNA with mouse bone marrow cells in vitro had no effect on stem cell numbers. DNA, RNA and protein synthesis in mouse bone marrow cells were similarly unaffected following in vitro incubation with ds RNA. Entrapment of ds RNA within liposomes was examined as a possible means of reducing ds RNA induced toxicity. It was also believed that liposome entrapment of ds RNA might result in enhanced interferon production. Unfortunately, entrapment of ds RNA within liposomes neither reduced ds RNA toxicity nor enhanced interferon production. The effect of ds RNA on non-specific immunity in the mouse was studied. Double-stranded RNA treatment of mice resulted in enhanced natural killer activity and enhanced phagocytic function of the reticuloendothelial system (RES). Possible mechanisms are discussed. The distribution and fate of i.p. administered free and liposome-entrapped ds RNA was studied in the mouse. Both free and liposome-entrapped ds RNA became localised in the liver and spleen, although proportionally more ds RNA was found in these organs when administered within liposomes. Double-stranded RNA was rapidly degraded in the liver, spleen, kidneys, lungs and heart, whilst degradation occurred at a much slower rate in the bone marrow, thymus and ileum. These organs were most affected by ds RNA treatment of mice, indicating an assocation between ds RNA toxicity and the persistence of undegraded ds RNA.