Lipoproteins and molecules for pattern recognition are centrally important in the innate immune response of both vertebrates and invertebrates. Mammalian apolipoproteins such as apolipoprotein E (apoE) are involved in LPS detoxification, phagocytosis, and possibly pattern recognition. The multifunctional insect protein, apolipophorin III (apoLp-III), is homologous to apoE. In this study we describe novel roles for apoLp-III in pattern recognition and multicellular encapsulation reactions in the innate immune response, which may be of direct relevance to mammalian systems. It is known that apoLp-III stimulates antimicrobial peptide production in insect blood, enhances phagocytosis by insect blood cells (hemocytes), and binds and detoxifies LPS and lipoteichoic acid. In the present study we show that apoLp-III from the greater wax moth, Galleria mellonella, also binds to fungal conidia and β-1,3-glucan and therefore may act as a pattern recognition molecule for multiple microbial and parasitic invaders. This protein also stimulates increases in cellular encapsulation of nonself particles by the blood cells and exerts shorter term, time-dependent, modulatory effects on cell attachment and spreading. All these responses are dose dependent, occur within physiological levels, and, with the notable exception of β-glucan binding, are only observed with the lipid-associated form of apoLp-III. Preliminary studies also established a beneficial role for apoLp-III in the in vivo response to an entomopathogenic fungus. These data suggest a wide range of immune functions for a multiple specificity pattern recognition molecule and may provide a useful model for identifying further potential roles for homologous proteins in mammalian immunology, particularly in terms of fungal infections, pneumoconiosis, and granulomatous reactions.