The phenoloxidase system, which is involved in encapsulation and melanization of foreign objects in crustacean, is found to be present in an inactive proenzyme form in the hemocytes of the lobster, Homarus americanas. Activation of the enzyme could be achieved either by treatment with an anionic detergent such as sodium dodecyl sulfate, or by a cationic detergent such as cetylpyridinium chloride, but not by either nonionic detergent or zwitterionic detergent. In addition, a number of fatty acids also activated the proenzyme. However, phospholipids, especially lysolecithin proved to be the most potent activator of prophenoloxidase. Therefore, it is proposed that apart from the well established proteolytic mode of activation, prophenoloxidase can also be activated by this alternative mode involving lipids.