The gene coding for lysozyme in banana prawn (Fenneropenaeus merguiensis) was cloned, sequenced and expressed in pET-32a vector. The deduced amino acid sequence of F. merguiensis lysozyme showed 37-93% similarity with the mouse, human, chicken, and tiger prawn counterparts. The lysozyme was purified to homogeneity and observed as a band of approximately 15 kDa in 12% SDS-PAGE. Semiquantitative RT-PCR analysis demonstrated that mRNA transcripts of lysozyme could be mainly detected in the tissues of hemocytes, gill, gonad and lymphoid organ of unchallenged shrimps, whereas the expression of lysozyme transcripts was increased in all the tested tissues after heat-killed Vibrio alginolyticus challenge. The temporal expression of lysozyme mRNA in hemolymph challenged by Micrococcus luteus and V. alginolyticus was both up-regulated and reached the maximum level at 8 and 16 h post stimulation, respectively, and then dropped back to the original level. Bacteriolytic activity of lysozyme against different bacterial cultures was determined by solid phase as well as turbidimetric assay. Lysis was obtained against gram positive and gram negative bacteria with strong inhibition against shrimp pathogens V. alginolyticus and V. parahemolyticus. In addition, the study of inhibition mechanism revealed that the antibacterial activity of lysozyme was a result of bactericidal effect.