1. 1. Haemolysed cells which can bring about only slight degradation of folic acid, can be activated by heat treatment for ten minutes at 100°C. The active for the enzyme liberated by heat treatment has the same cofactor requirements as the ammonium sulphate fraction F 2. 2. 2. Among the various ions tested for their effect on F 2, Co ++ activated the system. Cyanide and azide, were strong inhibitors. Mg ++ and Ca ++ were without effect. None of the metal ions tested could replace Mn ++ as an essential cofactor. 3. 3. Vitamin C was found to be a potent inhibitor of the system and its effect could be partially reversed by increasing the concentration of glutathione. It is therefore suggested that vitamin C exerts its inhibitory effect by inactivating reduced glutathione. 4. 4. Experiments relating to substrate specificity have shown that aminopterin can be degraded by the enzyme system in blood. A-methopterin and folinic acid are not attacked. 5. 5. Among the various closely related derivatives tested for their effect on folic acid degradation: A-methopterin, folinic acid, xanthopterin, p-aminobenzoic acid, and sulphanilamide inhibited the system p-aminobenzoylgutamic acid and 2-amino-4-hydoxy-6-formy l-pteridine when added individually were inffective, but mixtures of the two derivatives were inhibitory. In conformity with this fact, the products of enzymic reaction also inhibited the folic acid degradation in the present system.