Serine proteases play fundamental roles in invertebrate development, hemostasis, and innate immunity. This is exemplified by the limulus Factor C, which is a serine protease that binds a pathogen-associated molecule, lipopolysaccharide (LPS) to trigger a blood coagulation cascade. As a central molecule in the limulus innate immunity and hemostasis, Factor C gene expression has been detected in two major immune defense tissues, the amebocytes and hepatopancreas. Infection of the limulus with live Gram-negative bacteria induces a 2-3-fold increase in mRNA transcripts in both tissues. However, in vitro studies in Drosophila cell lines using Factor C promoter-reporter chimera DNA constructs, and site-directed mutagenesis of the promoter demonstrated that a proximal kappaB binding site, aided by an adjacent dorsal-like binding motif responds dramatically to LPS and dorsal transcription factor overexpression. Electrophoretic mobility shift assay further confirmed a strong interaction of the limulus kappaB motif with Rel proteins. However, deletion constructs of the Factor C promoter harboring different numbers of dorsal-like binding sites upstream of the kappaB motif as well as the electrophoretic mobility shift assay of these motifs with Rel proteins strongly suggest that the up-regulation of Factor C gene expression is attenuated during microbial challenge. The repression of the dramatic activation of this pathogen-responsive gene by LPS is probably effected via competition between the dorsal-like motifs over the proximal LPS-responsive kappaB unit, or through inhibition from the upstream repressive element(s), which accounts for the gene expression pattern observed in vivo. Our findings demonstrate that blood coagulation and innate immune response are integrated at the transcriptional level in this ancient organism, and that this LPS-responsive serine protease is controlled by an evolutionarily conserved NFkappaB pathway.