The insect cytokine paralytic peptide (PP) induces muscle contraction in silkworm larvae. Here we demonstrate that bacterial and fungal cell wall components, peptidoglycan and glucan, stimulate muscle contraction via activation of PP in the hemolymph. Anti-PP antibody suppressed the muscle contraction induced by PP, peptidoglycan, or glucan. The contraction was also inhibited by free radical scavengers and serine protease inhibitors. Moreover, injecting live silkworms with peptidoglycan or glucan generated the active form of PP. The active form of PP was also produced in vitro when peptidoglycan or glucan was incubated with hemolymph containing the PP precursor. Generation of the active form of PP was suppressed by free radical scavengers and serine protease inhibitors. Furthermore, PP activation in isolated hemolymph was inhibited by potassium cyanide, suggesting that cellular activity is involved. Stimulation by peptidoglycan promoted the generation of reactive oxygen species by silkworm hemocytes. The addition of either the active form of PP or anti-PP antibody to Staphylococcus aureus injected into silkworm larvae delayed or enhanced, respectively, the killing effect of S. aureus, suggesting that activated PP contributes to host resistance to infectious pathogens. These findings suggest that immunologic stimulants such as peptidoglycan or glucan induce reactive oxygen species production from larval hemocytes, followed by the activation of serine protease, which mediates the PP processing reaction and leads to defensive responses.