The effect of prophylactic antibiotics on bacterial colonization of the respiratory tract and on general progression of cystic fibrosis was studied in a two-year prospective study of 47 mildly to moderately affected patients. One group of patients received inhaled cephaloridine and the other received no inhaled antibiotic; both groups received cloxacillin orally. Carriage of Haemophilus influenzae was greater in the group not receiving inhaled antibiotic (55% vs 20%). Rates of carriage of Staphylococcus aureus (23%). Pseudomonas aeruginosa (greater than 90%). Pseudomonas cepacia (45%), and other organisms were similar in both groups. There were no significant differences between the two groups in incidence of respiratory tract infections or hospital admissions, clinical scores, radiologic scores, or rate of change of pulmonary function. Although continuous antistaphylococcal antibiotic prophylaxis may be successful in suppressing colonization with S. aureus, it may also contribute to the high rates of carriage of Ps. aeruginosa and Ps. cepacia observed in patients with cystic fibrosis.