Phagocytic and bactericidal activity of polymorphonuclear neutrophil leukocytes (PMN) isolated from blood and milk, against Staphylococcus aureus, was compared between groups of six healthy dairy cows in early, mid- and late lactation using a bacteriological assay. PMN were isolated from blood with a high degree of purity, but the cells isolated from milk contained variable amounts of macrophages (MΦ) and lymphocytes (L). The results were therefore calculated using the percentage PMN in order to evaluate phagocytosis and killing by PMN only. Blood PMN phagocytosed 82% Staph. aureus and milk PMN 43% on average and there was no significant difference between the different stages of lactation. The bactericidal activity of blood PMN against Staph. aureus was 36±8% in early lactation (significantly different from mid lactation, P<0·05), 64±10% in mid lactation and 53±6% in late lactation. Milk PMN killed only 6±3% Staph. aureus in early lactation (significantly different from mid lactation, P<0·01), 27±3% in mid lactation and 20±9% Staph. aureus in late lactation. The ratio of the bactericidal activity of milk to blood PMN was 0·08, 0·43 and 0·22 in early, mid- and late lactation, respectively. In addition to the decreased function, the number of cells in milk (somatic cell count, SCC) was also 60% lower in early lactation than in mid lactation cows (P<0·01). Our results suggest an impairment of blood and milk-resident PMN bactericidal activity against Staph. aureus and a decreased number of milk-resident PMN in dairy cows at the onset of lactation.