Melanization participates in various insect physiological processes including antimicrobial immune responses. Phenoloxidase (PO), a critical component of the enzyme system catalyzing melanin formation, is produced as an inactive precursor prophenoloxidase (proPO) and becomes active via specific proteolytic cleavage by proPO activating proteinase (PAP). In Manduca sexta, three PAPs can activate proPOs in the presence of two serine proteinase homologs (SPH1 and SPH2). While the hemolymph proteinases (HPs) that generate the active PAPs are known, it is unclear how the proSPHs (especially proSPH1) are activated. In this study, we isolated from plasma of bar-stage M. sexta larvae an Ile-Glu-Ala-Arg-p-nitroanilide hydrolyzing enzyme that cleaved the proSPHs. This proteinase, PAP3, generated active SPH1 and SPH2, which function as cofactors for PAP3 in proPO activation. Cleavage of the purified recombinant proSPHs by PAP3 yielded 38 kDa bands similar in mobility to the SPHs formed in vivo. Surprisingly, PAP3 also can activate proPAP3 to stimulate melanization in a direct positive feedback loop. The enhanced proPO activation concurred with the cleavage activation of proHP6, proHP8, proPAP1, proPAP3, proSPH1, proSPH2, proPOs, but not proHP14 or proHP21. These results indicate that PAP3, like PAP1, is a key factor of the self-reinforcing mechanism in the proPO activation system, which is linked to other immune responses in M. sexta.