The sequential events of the properdin system were analyzed. Properdin-depleted serum allows the formation of a Factor B- and D-dependent C3 convertase. This enzyme, called the properdin-receptor-forming enzyme, was shown to utilize a novel serum component, the initiating factor. The protein is a beta-globulin in precursor form and is distinct from immunoglobulins. The function of the enzyme is to deposit C3b on the surface of activator particles. Apparently doublets of C3b are required for the formation of the properdin-activating principle. It consists of a complex containing surface-bound C3b and activated Factor B. properdin precursor is activated by binding to this complex without detectable change in molecular weight. The transition of properdin precursor to activated properdin is probably caused by a conformational change. The complex, consisting of bound C3b, properdin, and activated Factor B, represents the enzyme that acts on C5, thereby initiating self-assembly of the membrane attack system. Native C3 is not needed for the function of the enzyme. It is disassembled by soluble C3 or C3b and its formation is under the control of the properdin-receptor-destroying enzyme, which may be identical with the C3b inactivator.