Peptidoglycan recognition proteins (PGRPs) are key regulators of insect immune responses. In addition to recognition PGRPs, which activate the Toll and Imd pathways, the Drosophila genome encodes six catalytic PGRPs with the capacity to scavenge peptidoglycan. We have performed a systematic analysis of catalytic PGRP function using deletions, separately and in combination. Our findings support the role of PGRP-LB as a negative regulator of the Imd pathway and brought to light a synergy of PGRP-SCs with PGRP-LB in the systemic response. Flies lacking all six catalytic PGRPs were still viable but exhibited deleterious immune responses to innocuous gut infections. Together with recent studies on mammalian PGRPs, our study uncovers a conserved role for PGRPs in gut homeostasis. Analysis of the immune phenotype of flies lacking all catalytic PGRPs and the Imd regulator Pirk reveals that the Imd-mediated immune response is highly constrained by the existence of multiple negative feedbacks.