The prophenoloxidase activating system plays a major role in the defense mechanism of arthropods. In the present study, the phenoloxidase activity and its location in the hemolymph of the spiny lobster Panulirus argus is presented. Phenoloxidase activity was observed in the hemocyte lysate supernatant (HLS) and plasma after their incubation with trypsin. Higher amounts of trypsin were required to activate the HLS prophenoloxidase, due to the presence of a trypsin inhibitor in this fraction. Activation of prophenoloxidase was found when HLS was incubated with calcium, with an optimal pH between 7.5 and 8. This spontaneous activity is due to the prophenoloxidase activating enzyme, a serine proteinase that activates the prophenoloxidase once calcium ions were available. SDS was able to induce phenoloxidase activity in plasma and hemocyte fractions. Prophenoloxidase from HLS occurs as an aggregate of 300kDa. Electrophoretic studies combining SDS-PAGE and native PAGE indicate that different proteins produced the phenoloxidase activity found in HLS and plasma. Thus, as in most crustaceans, Panulirus argus contains a prophenoloxidase activating system in its hemocyte, comprising at least the prophenoloxidase activating enzyme and the prophenoloxidase. Finally, it is suggested that phenoloxidase activity found in plasma is produced by hemocyanin.