In response to microbial infection, insects mount several defense reactions including the induction of proteolytic cascades that lead to localized melanization and coagulation. Melanization requires the activation of prophenoloxidase (proPO) to its active form phenoloxidase (PO), a key enzyme that leads to the formation of melanin at wound sites and around intruding microorganisms in the hemolymph. Clotting is critical in limiting hemolymph loss and initiating wound healing following injury; it quickly acts to form a solid barrier against infection by immobilizing microorganisms and promoting their killing. Recent advances in Drosophila and other insects imply a possible link between PO and the coagulation system, although the exact molecular mechanisms controlling this interaction appear to be complex and are still not well defined. The development of hemolymph experimental techniques in Drosophila larvae together with proteomic analysis have further led to the identification of proPO as a cross-linking component that is involved in the hardening and melanization of clots. However, clot PO activity varies between insect species and life stages, depending on physiological and ecological conditions. Here we review our current knowledge of the association between PO and coagulation and discuss the implications of the previous findings on insect innate immunity and hemostasis.