Mammalian chymotrypsin-like serine proteases (SPs) are one of the best-studied family of enzymes with roles in a wide range of physiological processes, including digestion, blood coagulation, fibrinolysis and humoral immunity. Extracellular SPs can form cascades, in which one protease activates the zymogen of the next protease in the chain, to amplify physiological or pathological signals. These extracellular SPs are generally multi-domain proteins, with pro-domains that are involved in protein-protein interactions critical for the sequential organization of the cascades, the control of their intensity and their proper localization. Far less is known about invertebrate SPs than their mammalian counterparts. In insect genomes, SPs and their proteolytically inactive homologs (SPHs) constitute large protein families. In addition to the chymotrypsin fold, many of these proteins contain additional structural domains, often with conserved mammalian orthologues. However, the largest group of arthropod SP regulatory modules is the clip domains family, which has only been identified in arthropods. The clip-domain SPs are extracellular and have roles in the immune response and embryonic development. The powerful reverse-genetics tools in Drosophila melanogaster have been essential to identify the functions of clip-SPs and their organization in sequential cascades. This review focuses on the current knowledge of Drosophila clip-SPs and presents, when necessary, data obtained in other insect models. We will first cover the biochemical and structural features of clip domain SPs and SPHs. Clip-SPs are implicated in three main biological processes: the control of the dorso-ventral patterning during embryonic development; the activation of the Toll-mediated response to microbial infections and the prophenoloxydase cascade, which triggers melanization. Finally, we review the regulation of SPs and SPHs, from specificity of activation to inhibition by endogenous or pathogen-encoded inhibitors.