Toll and related proteins play important roles in innate immunity in both invertebrates and vertebrates. In Drosophila melanogaster, Tehao shares a striking similarity in its intracellular domain with Toll. In this paper, we show that Tehao is expressed throughout development and appears to be glycosylated. In transiently transfected cells, Tehao activated both Dorsal and the transcription of endogenous drosomycin and metchnikowin genes. Purified recombinant Tehao interacted specifically in vitro not only with the Pelle protein kinase, but also with the Toll intracytoplasmic domain. Remarkably, Tehao was found to activate Dorsal-dependent transcription in a synergistic manner with Toll, as well as Pelle in co-transfected cells. Thus, Tehao, alone or with Toll as a multimeric complex, has the potential to participate in both the development and innate immune responses of Drosophila.