A novel component of the properdin system has been discribed which represents a heretofore unrecognized human serum protein. The protein has been tentatively termed the initiating factor (IF) because it functions in the initial reaction of the properdin pathway. IF is a 170,000 dalton beta-pseudoglobulin which is composed of two presumably identical 85,000 dalton chains linked by disulfide bonds. The protein reacts with antibody to nephritic factor, which is defined by its activity and is found in the serum of patients with certain nephritides. The activity of IF is heat stable. Upon treatment of serum with activators of the alternative pathway, the initial C3 convertase is assembled from IF, Factors D and C, C3, and magnesium without participation of properdin. It is the function of the enzyme to deposit C3b on the surface of the activator particles, thereby affording generation of the solid phase enzymes of the pathway, a process that is a prerequisite for properdin activation. By exposure to low pH, IF assumed the electrophoretic mobility of psi-globulin and acquired the ability to generate without activators a fluid phase C3 convertase in serum. Serum depleted of IF did not allow activation of the properdin pathway. Serum depleted of properdin did permit activation of the pathway and expression of cytolytic activity. These results raise the possibility that IF represents the recognition unit of the pathway.