Drosophila has a primitive yet highly effective innate immune system. Although the infection-dependent activation mechanisms of the Drosophila immune system are well understood, its inhibitory regulation remains elusive. To find novel suppressors of the immune system, we performed a genetic screening for Drosophila mutants with hyperactivated immune responses and isolated a loss-of-function mutant of caspar whose product is homologous to Fas-associating factor 1 in mammals. Interestingly, caspar mutant flies showed increased antibacterial immune responses including increased resistance to bacterial infection and a constitutive expression of diptericin, a representative antibacterial peptide gene. Conversely, ectopic expression of caspar strongly suppressed the infection-dependent gene expression of diptericin, which allowed bacterial outgrowth. Consistent with these physiological phenotypes, Caspar negatively regulated the immune deficiency (Imd)-mediated immune responses by blocking nuclear translocation of Relish, an NF-kappaB transcription factor. In addition, we further demonstrated that Dredd-dependent cleavage of Relish, a prerequisite event for the nuclear entry of Relish, is the target of the Caspar-mediated suppression of the Imd pathway. Remarkably, Caspar was highly specific for the Imd pathway and did not affect the Toll pathway, which is crucial for antifungal immunity. Collectively, our elucidation of an inhibitory mechanism of the Imd pathway by Caspar will provide a valuable insight into understanding complex regulatory mechanisms of the innate immune systems in both Drosophila and mammals.