Using an experimental model for allergic inflammation of the air pouch type in rats, the effects of dexamethasone and indomethacin on leukocyte infiltration and level of chemotactic activity in the inflammatory exudate were examined to clarify the mechanisms of anti-inflammatory effects of glucocorticoids. Both dexamethasone and indomethacin when locally administered inhibited leukocyte infiltration, while chemotactic activity of the exudate was reduced by dexamethasone only. Indomethacin failed to reduce the level of chemotactic activity. Suppression by dexamethasone of the level of chemotactic activity became evident prior to the decrease in the number of leukocytes in the inflammatory exudate. These results suggest that the anti-inflammatory steroids manifest their inhibitory effect on leukocyte infiltration by inhibiting the generation of chemotactic factors in the inflammatory site. Besides this, the possible production of some inhibitory factors by the steroids may be considered as an alternative mechanism.