S U M M A R YPotassium tellurite (K,TeO,) reduction in the obligate aerobe Rhodotorula nzuciluginosa 49 and the facultative anaerobe Saccharomyces cerevisiae 1-434 occurs on localized areas of endoplasmic reticulum. The reduction product is granular and is found in close association with the membranes of specific parts of the endoplasmic reticulum. The site of reduction is the same whether R. mucilaginosa 49 is grown on a respiratory substrate (sodium malate) or a fermentable substrate (glucose).Increasing concentrations of K,TeO, increasingly inhibit the growth of Rhodotorula mucilaginosa 49. Its rate of oxygen uptake is not altered when grown in the presence of 0.04% K,TeO,, but in Saccharomyces cerevisiae 1-434 it decreases under the same conditions. Growth of S. cerevisiae 1-434 is completely inhibited with glycerol as substrate in the presence of K,TeO,.