Melanization, and hence the participation of phenoloxidase, in defense mechanism of arthropods is well established. However, in the living fossil, horseshoe crab, it has been claimed that the prophenoloxidase system widely found in the hemolymph of most arthropods is absent. On the contrary, we present evidence for the presence of a prophenoloxidase system in the hemolymph of Limulus and a method to study its activation. Activation of prophenoloxidase was achieved by treatment with either the anionic detergent, SDS, or the cationic detergent, cetylpyridinium chloride. The detergents seemed to bind to the proenzyme below their critical micellar concentration and induce conformational changes that cause the activation of prophenoloxidase. In addition, a number of fatty acids and phospholipids also activated the prophenoloxidase. Proteases such as trypsin activated the enzyme only marginally. The approximate molecular weight of the proenzyme was found to be 70,000. Substrate specificity studies, product analysis and inhibition experiments revealed that the Limulus enzyme is a typical o-diphenoloxidase. The possible reasons for the failure to detect the phenoloxidase activity by earlier workers are discussed.