Intracytoplasmic inclusions containing immunoglobulin (Ig) and complement (C3) are found in normal neutrophils (PMN) after incubation with SLE sera (indirect method). These inclusions are believed to be immune complexes removed by phagocytosis from the SLE patients' sera in vitro. Similar inclusions have also been noted in the circulating PMN from patients with SLE (direct method). By both direct and indirect methods, IgG-staining intracytoplasmic inclusions were present in preparations from patients with SLE, chronic liver disease, and Felty's syndrome while none of the normal controls had any inclusions. Using ethidium bromide (EB), a fluorescent stain for double-stranded polynucleotides, red fluorescence was noted in the inclusions of some circulating SLE PMN (36% of patients) and in normal PMN exposed to SLE sera in 67% of SLE patients, suggesting that polynucleotides were part of these complexes. Such staining was not present in control inclusions produced with heat aggregated IgG, nor in any of the patient control groups. Addition of DNA to some SLE sera increased the intensity of the red fluorescence suggesting the presence of antibodies to polynucleotides which can combine with the added DNA. Some originally negative sera were converted to positive by addition of DNA. Purified IgG fractions from SLE sera did not produce inclusions or EB positively unless DNA was added. IgG fractions from normal sera did not produce inclusions with or without added DNA. These findings suggest (1) that normal PMN on exposure to SLE sera develop intracytoplasmic inclusions by phagocytosis of immune complexes containing double-stranded polynucleotides and antibodies to polynucleotides and (2) such complexes may be phagocytosed in vivo as indicated by the presence of inclusions in vivo and contribute to the number of granulocyte disturbances seen in SLE patients. These abnormalities in granulocyte function may be important predisposing factors for infection in patients with active SLE.