The interaction between lipopolysaccharide (LPS) and an LPS-sensitive serine protease zymogen, factor C, purified from horseshoe crab (Tachypleus tridentatus) hemocytes, was investigated to elucidate the LPS-mediated activation of factor C. The rate of activation of the zymogen factor C was highly dependent on the concentration of LPS and on temperature, and the curve of amount of LPS versus activation showed saturation at 37 degrees C. Moreover, a high-molecular-mass complex formed between factor C and LPS was found in a gel-filtration experiment on a Sepharose 4B column. This complex formation was also confirmed by double diffusion analysis on agarose plates. Triton X-100, which destroys LPS micelles, strongly inhibited the LPS-mediated activation of factor C but not activated factor C. These results indicate that the binding of factor C with LPS is required for its activation and that only LPS-associated factor C generates the active factor C. On the other hand, the LPS-mediated activation of factor C was strongly inhibited by the S-alkylated heavy chain derived from factor C. In contrast, the S-alkylated factor C-light chain did not show any inhibitory effect on the activation of factor C, suggesting that the heavy chain located in the NH2-terminal portion of factor C contains an LPS-binding region.