A direct correlation between the absorbance of a thermophilic bacillus and specific amidase activity was observed, which was found to depend on the cell density of the culture rather than on the time of contact of the culture with the inducer. Dilution of high density cultures caused the specific amidase activity to decrease. Environmental factors such as pH, concentration of inducer or degree of aeration, and level of NH+4 and glutamate had no effect on amidase synthesis. The decrease in amidase activity upon dilution could not be ascribed to destruction by oxygen or by inactivation or decay. Several lines of evidence suggest that catabolite repression is responsible for the phenomenon described. Succinate-grown cultures gave a stronger dilution effect thatn glutamate-grown cells. The mutant strain E-21, relatively resistant to catabolite repression, did not show the characteristic dilution effect nor the direct correlation between absorbance and specific amidase activity.