In six of 11 subjects challenged with rhinovirus 21, nasal interferon was produced in levels sufficient to inhibit replication of 3 logs or more of rhinovirus 21 in tissue culture. In eight of 14 subjects similarly challenged after treatment for 24 hr with an alkyl-substituted propanediamine, nasal interferon was produced 24 hr earlier, and the levels were slightly higher. Drug alone induced interferon in four of eight subjects. Thus, topical application of the nonabsorbable compound, N,N-dioctadecyl-N′-bis-(hydroxyethyl) -propanediamine, induced nasal interferon and enhanced production of virus-induced interferon. Overall, there was no difference between the drug- and placebo-treated groups in rate of infection or incidence of illness. Faster recovery from illness was associated with appearance of high titers of interferon in nasal secretions. The reduced severity of symptoms that followed pretreatment with drug was independent of the effect of interferon. It may be concluded that any beneficial effect of secretory interferon as a result of viral infection is poorly related to its antiviral action. This infection began during the lag phase before interferon production, and no inference can be made as to the effect of preformed interferon on rhinovirus infection.