In Drosophila, the Imd pathway is activated by diaminopimelic acid-type peptidoglycan and triggers the humoral innate immune response, including the robust induction of antimicrobial peptide gene expression. Imd and Relish, two essential components of this pathway, are both endoproteolytically cleaved upon immune stimulation. Genetic analyses have shown that these cleavage events are dependent on the caspase-8 like Dredd, suggesting that Imd and Relish are direct substrates of Dredd. Among the seven Drosophila caspases, we find that Dredd uniquely promotes Imd and Relish processing, and purified recombinant Dredd cleaves Imd and Relish in vitro. In addition, interdomain cleavage of Dredd is not required for Imd or Relish processing and is not observed during immune stimulation. Baculovirus p35, a suicide substrate of executioner caspases, is not cleaved by purified Dredd in vitro. Consistent with this biochemistry but contrary to earlier reports, p35 does not interfere with Imd signaling in S2* cells or in vivo.