Danazol, an attenuated androgen, is useful in endometriosis, idiopathic thrombocytopenic purpura (ITP), and autoimmune hemolytic anemia (AIHA). However, its mechanism of action is unknown. We investigated the possibility that danazol affects cell membranes directly. Red cell osmotic fragility was studied in patients receiving danazol. A significant decrease in osmotic fragility was observed. Accompanying the change, peripheral blood smears showed many target cells and electron microscopy revealed extra folds in erythrocyte membranes. Twenty-two patients were studied prospectively before and after danazol. Osmotic fragility decreased significantly (P less than 0.001) in 1 month of therapy and progressed with further treatment. A rebound increase (P less than 0.01) was observed in 1 month after discontinuation of danazol among 16 patients. Incubation experiments showed that danazol-induced changes are not reversed with normal sera. Patient sera did not induce the changes in normal red cells. Danazol in vitro protected red cells from osmotic lysis at low concentrations but enhanced lysis at high concentrations. We suggest that danazol alters red cell membranes directly to increase their surface area, inducing target cell formation and increasing their resistance to osmotic lysis.