Innate immunity is a critical metazoan defense strategy that rapidly detects and neutralizes invading microbes. As the signaling pathways that drive innate immune responses are evolutionarily conserved, there is considerable interest in the characterization of innate immune signaling in genetically tractable models, such as Drosophila melanogaster. Drosophila responds to detection of diamonopimelic-type microbial peptidoglycan through activation of the immune deficiency (Imd) pathway, a signaling pathway with numerous similarities to the mammalian pro-inflammatory TNF pathway. In this manuscript, we focus on a molecular and in vivo characterization of Dnr1, a putative regulator of Imd pathway activity. A previous cell culture RNAi screen indicated that Dnr1 may serve as a negative regulator of the Imd pathway. However, there are no in vivo data to validate this hypothesis and there are scant molecular data to identify the mechanism by which Dnr1 may inhibit the Imd pathway. In this manuscript, we present in vivo data that are consistent with a negative regulatory role for Dnr1 in the Imd pathway. Additionally, we provide molecular data to indicate that Dnr1 inhibits the Imd pathway at the level of the initiator caspase Dredd.