✓ Edema of the spinal cord, secondary to an impact injury produced in cats, was measured chemically. One day after injury a decrease in percentage dry weight and potassium concentration and an increase in sodium concentration were seen in the injured cord. By the second day these changes had spread to adjacent tissue. Edema was maximal between the third and sixth day and had begun to recede by the ninth day. A net loss of potassium, not directly related to the edematous changes, was observed throughout the analyzed cord starting on the third day and persisting on the ninth day after injury, when edema was regressing. Dexamethasone, started 48 hours before or 5 or 24 hours after injury had only minimal effect on edema but prevented loss of potassium from the injured cord. Six days after injury this effect was statistically significant in all three groups of dexamethasone-treated animals. All treated animals showed significantly better functional recovery than the untreated cats. On the sixth post-injury day the functional state of all animals was highly correlated with the potassium content of the spinal cord. Thus, the beneficial effect of dexamethasone may be related to the postulated role of steroid treatment in the maintenance of structural integrity of cellular elements in traumatized tissues. This could result in a better functional state of the injured cord, as well as in the maintenance of the normal content of potassium, the principal intracellular ion.