The effect of topically applied N-5', an inhibitor of chemical mediator release from mast cells, on the carrageenin-air-pouch inflammation was studied. The formation of granulation tissue, the accumulation of exudate and the number of infiltrating cells were significantly reduced by the treatment with N-5' (100 mg/kg). The collagen content in granulation tissue was dose-dependently reduced without affecting the noncollagen protein and DNA content by treatment with N-5'. At a dose of 100 mg/kg of N-5', prolyl hydroxylase activity in the tissue was significantly decreased. The selective inhibition of collagen accumulation in granulation tissue resulted from reduction of collagen biosynthesis in vivo. N-5' did not directly inhibit collagen synthesis by diploid fibroblasts, but inhibited fibroblast proliferation in culture. Such results indicate that one of the inhibitory mechanisms of collagen accumulation by N-5' in inflamed sites may involve the inhibition of fibroblast proliferation.