Limulus polyphemus, the American horseshoe crab, has a single type of circulating blood cell, the granular amebocyte, which is the horseshoe crab's primary cellular defense against microbial infection. On exposure to gram-negative bacteria or their endotoxins, the amebocytes degranulate, releasing the clotting protein coagulogen and a number of proteases. The protease cascade converts the soluble coagulogen to insoluble coagulin, which forms fibrous clots that seal off the site of infection. The first description of this clotting reaction in the 1950s initiated development of Limulus amebocyte lysate and spurred an intensive study of the amebocytes. However, the site or sites and timing of amebocyte production have yet to be determined. We report here that during embryonic development in Limulus polyphemus, amebocyte production begins at stage 18. The first amebocytes detected are found in developing hemocoel cavities, and the cells may derive from previously undifferentiated yolk nuclei.