Macrophages isolated from the involuted bovine mammary gland were cultured in vitro. Phagocytosis of opsonized Staphylococcus aureus occurred rapidly, but intracellular killing of bacteria was slow. Many intracellular staphylococci survived for up to 4 d exposure to extracellular cloxacillin and emerged from within the macrophages to multiply extracellularly when the antibiotic was inactivated. Rifampicin was significantly more efficient than cloxacillin in killing intracellular S. aureus after 18 h incubation, but it too failed to sterilize the cultures within 3 d. Staphylococci, which had remained viable within macrophages during 20 h incubation with extracellular cloxacillin, showed an increased sensitivity to dilute lysostaphin on subsequent exposure. A 3 d course of intramammary therapy with cloxacillin, commencing simultaneously with an infecting inoculum of ∼108 colony forming units (c.f.u.) S. aureus, apparently eliminated the infection from one quarter of the udders of each of three lactating cows, but bacteria were re-isolated from two cows after a delay of several days. However, when other quarters of the same cows were infected with ∼108 c.f.u. S. aureus which had been phagocytosed by autologous mammary macrophages, similar simultaneous antibiotic therapy failed to affect these infections. The in vitro and in vivo findings indicate the significance of intracellular survival of S. aureus as a factor contributing to failure of antibiotic therapy.