Microbial recognition is a key step in regulating the immune signaling pathways of multicellular organisms. Peptidoglycan, a component of the bacterial cell wall, exhibits immune stimulating activity in both plants and animals. Lysin motif domain (LysMD) family proteins are ancient peptidoglycan receptors that function in bacteriophage and plants. This report focuses on defining the role of LysMD-containing proteins in animals. Here, we characterize a novel transmembrane LysMD family protein. Loss-of-function mutations at thelysMD3/4locus in Drosophila are associated with systemic innate immune activation following challenge, so we refer to this gene as immune active (ima). We show that Ima selectively binds peptidoglycan, is enriched in cell membranes, and is necessary to regulate terminal innate immune effectors through an NF-kB–dependent pathway. Hence, Ima fulfills the key criteria of a peptidoglycan pattern recognition receptor. The human Ima ortholog, hLysMD3, exhibits similar biochemical properties. Together, these findings establish LysMD3/4 as the founding member of a novel family of animal peptidoglycan recognition proteins.