The pyrin domain was identified recently in multiple proteins that are associated with apoptosis and/or inflammation, but the physiological and molecular function of these proteins remain poorly understood. We have identified Caspy and Caspy2, two zebrafish caspases containing N-terminal pyrin domains. Expression of Caspy and Caspy2 induced apoptosis in mammalian cells that were inhibited by general caspase inhibitors. Biochemical analysis revealed that both Caspy and Caspy2 are active caspases, but they exhibit different substrate specificity. Caspy, but not Caspy2, interacted with the zebrafish orthologue of ASC (zAsc), a pyrin- and caspase recruitment domain-containing protein identified previously in mammals. The pyrin domains of both Caspy and zAsc were required for their interaction. Furthermore, zAsc and Caspy co-localized to the "speck" when co-transfected into mammalian cells. Enforced oligomerization of zAsc, but not simple interaction with zAsc, induced specific proteolytic activation of Caspy and enhanced Caspy-dependent apoptosis. Injection of zebrafish embryos with a morpholino antisense oligonucleotide corresponding to caspy resulted in an "open mouth" phenotype associated with defective formation of the cartilaginous pharyngeal skeleton. These studies suggest that zAsc mediates the activation of Caspy, a caspase that plays an important role in the morphogenesis of the jaw and gill-bearing arches.