A major problem of comparative immunology is the characterization of the internal defense systems that lyse foreign cells, such as bacteria and other microbial pathogens that have gained entry into the body. The plasma cytolytic system of the American horseshoe crab, Limulus polyphemus, is sensitive to treatment with methylamine, which inactivates the abundant plasma defense protein alpha2-macroglobulin. This has been interpreted to mean that alpha2-macroglobulin plays an important role in hemolysis, analogous to the role of complement component C3 of the mammalian complement system (Enghild et al., 1990). Sensitivity to methylamine has been suggested to reflect an evolutionary homology with the plasma cytolytic system of mammals, in which the complement system is inactivated by the reaction of methylamine with complement components C3 and C4. C3, C4 and alpha2-macroglobulin contain an internal thiol ester bond linking cysteinyl and glutamic acid residues and methylamine inactivates all three proteins by reaction with the thiol-esterified glutamic acid. However, we have recently shown that the principal effector of hemolysis in Limulus is the plasma lectin, limulin (Armstrong et al., 1996). In this article we show that native, unreacted alpha2-macroglobulin is not involved directly in hemolysis but instead that methylamine-reacted alpha2-macroglobulin inhibits the hemolytic activity of limulin. Thus the thiol ester proteins alpha2-macroglobulin and C3 operate very differently in the hemolytic systems of Limulus and mammals and are not functionally homologous. Limulus alpha2-macroglobulin functions indirectly in hemolysis: its inactivation yields an inhibitory molecule for limulin-mediated hemolysis.