Phenoloxidase activity was revealed in blood cells of the compound ascidian Botryllus schlosseri. The enzyme activity was significantly increased after preincubation of blood lysate with trypsin, chymotrypsin or foreign carbohydrates and inhibited by the copper-chelating agents phenylthiourea and diethyldithio-carbamate. A significant reduction also occurred after preincubation in benzamidine. These data suggest that the enzyme is present inside the cells as an inactive proenzyme which is activated by serine proteases sensitive to carbohydrates. The role of phenoloxidase in Botryllus biology, with special regard to rejection reaction between non fusible colonies, is discussed.