We initiated a therapeutic program of continuous ambulatory peritoneal dialysis for patients with chronic renal failure. Our program resulted in many episodes of peritonitis arising from contamination due to the technical aspects of the procedure. Microbiologic evaluation showed that 73% of 97 episodes were culture positive, with gram-positive organisms causing most of the cases, especially early in dialysis. Gram-negative rods tended to occur later. Gram stains of dialysate effluent resulted in a disappointingly low yield of only 9% positivity. Cell counts were a dependable indicator of the presence of peritoneal inflammation and also of therapeutic success. Most patients responded well to intraperitoneal cephalothin, 125 mg/L for 10 to 14 d. The occurrence of peritonitis resulted in 0.93 years of hospitalization during the total of 15.45 patient-years on dialysis, which essentially negated the financial advantages of this method of treatment of chronic renal failure. For this to be a successful mode of therapy, advances in the prevention of peritonitis must be made.