A standard exercise test was employed on subjects with and without alcohol to determine the effect of O2 under these conditions. The influence of the inhalation of O2 on animals previously treated with alcohol was also studied. When severe muscular work was performed, the inhalation of O2 improved the efficiency of men both with and without previous alcohol ingestion but the effect on the pulmonary ventilation and the respiratory rate was more striking in the subjects who were previously given alcohol. In animals at rest, no discernible effect was produced by the inhalation of O2 but alcohol-treated animals collapsed under exposure to an atmosphere of 9% O2, differing in that way from the control animals. Psychological tests were generally necessary to reveal the improvement in mental function that resulted from O2 treatment. It is concluded that O2 to a slight but definite extent counteracts the effects of alcohol, which is at variance with the more marked counteracting influences reported by Palthe.