The activation of B lymphocytes, which regulate contact sensitivity to oxazolone, was studied in mice injected with bacterial lipopolysaccharide (LPS) 24 h before sensitization. These regulatory cells bear Ig receptors, are sensitive to mitomycin C treatment in vitro, and have precursors sensitive to cyclophosphamide. Their early induction needed the mitogenic signal of LPS, in that LPS deprived of lipid A did not induce B-cell-mediated suppression, and required little or no T-cell help, as they were produced in B mice. Possible mechanisms by which LPS-induced regulatory cells act and their relevance to other suppressor systems are discussed.