Insects depend solely upon innate immune responses to survive infection. These responses include the activation of extracellular protease cascades, leading to melanization and clotting, and intracellular signal transduction pathways inducing antimicrobial peptide gene expression. In Drosophila, the IMD pathway is required for antimicrobial gene expression in response to gram-negative bacteria. The exact molecular component(s) from these bacteria that activate the IMD pathway remain controversial. We found that highly purified LPS did not stimulate the IMD pathway. However, lipid A, the active portion of LPS in mammals, activated melanization in the silkworm Bombyx morii. On the other hand, the IMD pathway was remarkably sensitive to polymeric and monomeric gram-negative peptidoglycan. Recognition of peptidoglycan required the stem-peptide sequence specific to gram-negative peptidoglycan and the receptor PGRP-LC. Recognition of monomeric and polymeric peptidoglycan required different PGRP-LC splice isoforms, while lipid A recognition required an unidentified soluble factor in the hemolymph of Bombyx morii.