The nonsteroid anti-inflammatory drugs including phenylbutazone produce significant gastric ulceration and hemorrhage even when administered by an extragastric route. To investigate the mechanism involved, cervical sectioned rats received an intraileal injection of phenylbutazone as the sodium salt in methylcellulose. Gastric contractile activity as recorded with a miniature gastric balloon, and the stomach was perfused with either acid at pH 1 or buffer at pH 7. Rats receiving phenylbutazone developed a pattern of abnormally strong contractile activity that began 60 to 90 minutes after drug administration. The contracting stomachs of rats perfused with acid developed significantly more ulceration and bled more severely than buffer-perfused rats. Vagotomy or atropine prevented the gastric contractile response to phenylbutazone, and such rats failed to develop significant ulceration in spite of the fact that their stomachs were perfused with acid. Cervical sectioned rats treated with methylcellulose alone failed to develop the abnormal contractile pattern and showed no significant gastric injury or hemorrhage. It is concluded that the focal hemorrhagic lesions induced by the extragastric administration of phenylbutazone in the rat are the result of mucosal compression at specific sites secondary to the passage of extremely strong peristaltic waves. They are vagally mediated and although the presence of acid does not appear essential for their initiation, it plays a synergistic role in their development and hemorrhage.U