Over a period of 10 years, employees in a manufacturing plant experienced sporadic flu-like episodes after work in a basement containing a recirculated washwater mist. We report a cross-sectional study to define the flu-like illness and bioaerosol exposures. High concentrations of gram-negative bacteria (GNB) (> 10(7) cfu/ml) and endotoxin (range 34-46 micrograms/ml) were found in the water. Mist contained > 10(3) cfu/m3 of GNB, and endotoxin up to 13,900 to 27,800 ng/m3. Few fungi and thermotolerant Bacillus species and no Actinomycetes, Legionella species, or amoeba were found in washwater. Airborne levels of fungi were of the same species and magnitudes as outdoor samples. Subjects volunteered (n = 28) because of a history of flu-like symptoms or were randomly selected (n = 102) from workers with and without current exposure to the basement. No acute cases were examined. Cases did not fulfill criteria for hypersensitivity pneumonitis (HP) and high levels of IgG antibodies to water-borne antigens were not observed. However, among 20 subjects indicating a history of severe flu-like episodes (severe basement flu, SBF), diffusion capacity (DLCO) was significantly lower (p = 0.015) than among other workers. The prevalence of SBF was independent of smoking. Cases occurred in clusters, and SBF was more common among workers with intermittent exposure to the basement (19 cases) than with daily exposure (1 case). These findings suggest that SBF and associated chronically depressed DLCO resulted from toxic injury following high-level endotoxin exposure. Asthma was prevalent in the study population, particularly among employees with daily, rather than intermittent, exposure to endotoxin-containing mist (odds ratio 6.7, p = 0.02). Thus, endotoxin exposure in this study was associated with two distinct sequelae depending on the temporal pattern of exposure.