Parasitism by the braconid Microplitis demolitor suppressed the encapsulation response of its host, Pseudoplusia includens. Total haemocyte counts were higher in parasitized larvae than unparasitized larvae. Differential haemocyte counts did not differ between parasitized and unparasitized hosts, but the in vitro spreading behaviour of haemocytes was altered significantly by parasitism. Greater than 80% of plasmatocytes and granular cells from P. includens were unable to spread in vitro 2 h after oviposition by M. demolitor, and spreading of plasmatocytes remained suppressed through the course of parasitoid development. In addition, phenoloxidase activity in haemolymph was greatly reduced in parasitized larvae when compared to unparasitized larvae. Similar alterations in haemocyte spreading behaviour, phenoloxidase activity and encapsulation response were observed after injection of calyx fluid or purified polydnavirus from M. demolitor. The activity of polydnavirus was abolished by pretreatment with psoralen and ultraviolet irradiation which suggests the virus must be transcriptionally active to alter the host encapsulation response. Injection of venom did not affect haemocyte spreading or phenoloxidase activity, but dose-response studies indicated venom synergized the effects of calyx fluid. At equal doses, injection of calyx fluid plus venom had a greater and more persistent effect on plasmatocyte and granular cell spreading than injection of calyx fluid alone.