How multicellular organisms maintain immune homeostasis across various organs and cell types is an outstanding question in immune biology and cell signaling. In Drosophila, blood cells (hemocytes) respond to local and systemic cues to mount an immune response. While endosomal regulation of Drosophila hematopoiesis is reported, the role of endosomal proteins in cellular and humoral immunity is not well-studied. Here we demonstrate a functional role for endosomal proteins in immune homeostasis. We show that the ubiquitous trafficking protein ADP Ribosylation Factor 1 (ARF1) and the hemocyte-specific endosomal regulator Asrij differentially regulate humoral immunity. Asrij and ARF1 play an important role in regulating the cellular immune response by controlling the crystal cell melanization and phenoloxidase activity. ARF1 and Asrij mutants show reduced survival and lifespan upon infection, indicating perturbed immune homeostasis. The ARF1-Asrij axis suppresses the Toll pathway anti-microbial peptides (AMPs) by regulating ubiquitination of the inhibitor Cactus. The Imd pathway is inversely regulated-while ARF1 suppresses AMPs, Asrij is essential for AMP production. Several immune mutants have reduced Asrij expression, suggesting that Asrij co-ordinates with these pathways to regulate the immune response. Our study highlights the role of endosomal proteins in modulating the immune response by maintaining the balance of AMP production. Similar mechanisms can now be tested in mammalian hematopoiesis and immunity.A cascade of appropriate responses to infection or injury is dynamically regulated to co-ordinate the immune response. However, mechanistic details of how the immune organs and molecules they produce communicate, are poorly understood. In the open circulatory system of Drosophila, hemocytes carry out phagocytosis and melanization whereas the humoral immune response is mediated by the fat body and gut. Plasmatocytes, which form a majority of the hemocyte population, phagocytose invading pathogens, crystal cells melanize and restrict pathogens to the affected area and lamellocytes encapsulate and neutralize large objects such as parasites 1 . A serine protease cascade in crystal cells activates prophenoloxidase (ProPO), which then catalyzes the conversion of phenols to quinones that then polymerize to form melanin 2 . A Toll pathway-dependent protease inhibitor Serpin27A produced by the fat body is required to limit melanization to crystal cells 3, 4 . Thus mechanisms of transport and uptake are essential to regulate systemic communication and melanization. Larvae and adults deficient in Serpin27A or the ProPO mutant Black cells show spontaneous melanization yet are immune compromised 5 .Humoral immunity is primarily governed by the Toll and Imd (Immune deficiency) pathways, which regulate anti-microbial peptide (AMP) production. Fungi or Gram positive bacteria induce the Toll pathway, which causes activation of the NF-KB factor Dif or Dorsal and production of AMPs such as Drosomycin, Metchnikowin and Defensin. ...