In search for factors that cause encapsulation of foreign bodies in insect hemolymph we discovered that larval hemolymph of Galleria mellonella caused aggregation of mammalian erythrocytes. The hemagglutinating agent was identified as an 18-kDa protein that did not react with lectins. The sequence of 81 amino acids in three protein fragments and the properties of the protein revealed that it was Galleria homologue of apolipophorin III (apoLp-III). ApoLp-III was found in high amounts in the hemolymph of Galleria larvae, pupae, and adults, as well as in the molting fluid. The hemagglutinating action of the whole hemolymph or the purified apoLp-III was independent of the presence of sugars in the medium. This indicated that it was not mediated by carbohydrates on the erythrocyte surface. The hemagglutination was inhibited at low pH (3.0), in the absence of calcium ions, and in the presence of certain bacterial lipopolysaccharides or their essential component, the 2-keto-3-deoxyoctonate-3-deoxyoctulosonic acid (KDO). It is suggested that interaction of apoLp-III with lipopolysaccharides in bacterial cell walls may play a role in insect immune reactions.