Treatment of rats with endotoxin, as late as 24 h after beginning exposure to greater than 95 O2 at 1 atm, increases survival at 72 h from 20-30% to greater than 95% (J. Clin. Invest. 65: 1104, 1980), whereas treatment with corticosteroids reduces survival (Toxicol. Appl. Pharmacol. 47: 367, 1979). Since endotoxin is mitogenic to some cells and glucocorticosteroids decrease DNA synthesis by lung cells, we asked 1) is endotoxin mitogenic to the lung, and, if so, 2) is the mitogenic effect required for endotoxin to produce tolerance to hyperoxia? We found endotoxin administered in vivo does have a mitogenic effect on the lung as indicated by an increased rate of DNA synthesis by lung slices; dexamethasone blocked this effect. However, although dexamethasone given alone markedly diminished survival in hyperoxia, dexamethasone did not impair the protection conferred to rats by endotoxin against the edemogenicity and lethality of hyperoxia. Furthermore, dexamethasone did not diminish the rise of antioxidant enzyme activity in the lungs of endotoxin-treated O2-exposed rats. We conclude endotoxin can produce tolerance to hyperoxia even when its mitogenic action on the lung is substantially diminished.