Lipopolysaccharide (LPS) binding protein (LBP) is a key serum factor that mediates LPS activation of mononuclear cells. In the presence of LBP, 1/1,000 the concentration of LPS is sufficient to activate peripheral blood monocytes. Previous studies with Kupffer cells have shown a variable effect of serum on LPS activation of these cells and led to the conclusion that, unlike extrahepatic mononuclear cells, Kupffer cells do not respond to LPS in an LBP-dependent fashion. Because there are multiple components in serum other than LBP that might affect LPS activation, these reports with serum are difficult to interpret. To investigate the specific role of LBP in LPS activation of Kupffer cells, we produced a functional recombinant rat LBP using a baculovirus expression system, which we used to selectively examine the role of LBP's on Kupffer-cell function. Isolated Kupffer cells exposed to increasing concentrations of LPS (0, 1, 10 ng/mL) showed a dose-dependent increase in TNF-alpha production, which was augmented and accelerated by the presence of LBP. The effects of LBP on Kupffer cell activation by LPS are dependent on a functional Toll-like receptor 4 (Tlr 4) because Kupffer cells from C3H/HeJ mice failed to respond to LPS in the presence of LBP. LBP plays an important role in mediating Kupffer cell activation by LPS, and these effects are dependent on the presence of functioning Tlr 4.