Highly conserved during evolution, the enzyme Ubc9 activates the small ubiquitin-like modifier (SUMO) prior to its covalent ligation to target proteins. We have used mutations in the Drosophila Ubc9 (dUbc9) gene to understand Ubc9 functions in vivo. Loss-of-function mutations in dUbc9 cause strong mitotic defects in larval hematopoietic tissues, an increase in the number of hematopoietic precursors in the lymph gland and of mature blood cells in circulation, and an increase in the proportion of cyclin-B-positive cells. Some blood cells are polyploid and multinucleate, exhibiting signs of genomic instability. We also observe an overabundance of highly differentiated blood cells (lamellocytes), normally not found in healthy larvae. Lamellocytes in mutants are either free in circulation or recruited to form tumorous masses. Hematopoietic defects of dUbc9 mutants are strongly suppressed in the absence of the Rel/NF-kappaB-family transcription factors Dorsal and Dif or in the presence of a non-signaling allele of Cactus, the IkappaB protein in Drosophila. In the larval fat body, dUbc9 negatively regulates the expression of the antifungal peptide gene drosomycin, which is constitutively expressed in dUbc9 mutants in the absence of immune challenge. dUbc9-mediated drosomycin expression requires Dorsal and Dif. Together, our results support a role for dUbc9 in the negative regulation of the Drosophila NF-kappaB signaling pathways in larval hematopoiesis and humoral immunity.