Addition of commercial heparin to preparations of the coagulation system obtained by hypotonic lysis of Limulus amebocytes, prior to the addition of endotoxin from gram-negative bacteria, inhibited gelation. Activation of the cell-lysate proclotting enzyme, utilizing a diluted lysate preparation and synthetic substrates, was inhibited to a comparable extent with either anticoagulantly active or inactive heparin. Other glycosaminoglycans, including heparan sulfate, dermatan sulfate, chondroitin 4-sulfate, and chondroitin 6-sulfate, did not inhibit the generation of clotting enzyme activity. Experiments conducted with preparations of proactivator(s) and proclotting enzyme, obtained by fractionation of lysate with heparin-Sepharose, revealed that inhibition of endotoxin-dependent activation of amebocyte lysate by heparin is mediated by precipitation of the proactivator(s) and can be prevented by increasing the salt concentration.