The enzyme phenoloxidase is believed to be a component of internal defense in invertebrates. We detected phenoloxidase activity in the membrane fraction of hemocytes from the eastern oyster, Crassostrea virginica. The activity is associated with a protein with a molecular weight of 133 kDa. That the enzyme is a phenoloxidase and not a peroxidase was shown by inhibition of the activity by diethyldithiocarbamic acid. The phenoloxidase displayed a preference for diphenol substrates and was inactivated by incubation at temperatures above 70°C. The activity was highest in a pH range of 6.0–7.5. The oyster pathogen P. marinus causes serious disease in the commercial oyster, Crassostrea virginica, but not the mussel Geukensia demissa. We measured the effect of P. marinus cells on the phenoloxidase activity in hemolymph from C. virginica and G. demissa over a 6-h time course. The presence of P. marinus significantly suppressed the phenoloxidase activity of both species at the 2-h time interval. The phenoloxidase activity seemed to increase at the 4-hr and 6-h time intervals. These data suggest that a transient inhibition of host phenoloxidase may play a role in the study of P. marinus infection.