A cooperative processing and escalation method and system for use in multi-node application-layer security management is disclosed. The method includes the steps of identifying individual application security nodes, grouping and configuring nodes for cooperative processing, assigning the default operational mode at each node, assignment of logging and alert event tasks at each node, and defining escalation and de-escalation rules and triggers at each node. Both loosely-coupled and tightly-coupled configurations, each with its cooperative processing model, are disclosed. The method includes provision for central console configuration and control, near real-time central console dashboard operations interface, alert notification, and operator override of operational modes and event tasks.