The lipopolysaccharide (LPS)-binding protein (LBP) has a concentration-dependent dual role in the pathogenesis of gram-negative sepsis: low concentrations of LBP enhance the LPS-induced activation of mononuclear cells (MNC), whereas the acute-phase rise in LBP concentrations inhibits LPS-induced cellular stimulation. In stimulation experiments, we have found that LBP mediates the LPS-induced cytokine release from MNC even under serum-free conditions. In biophysical experiments we demonstrated that LBP binds and intercalates into lipid membranes, amplified by negative charges of the latter, and that intercalated LBP can mediate the CD14-independent intercalation of LPS into membranes in a lipid-specific and temperature-dependent manner. In contrast, prior complexation of LBP and LPS inhibited binding of these complexes to membranes due to different binding of LBP to LPS or phospholipids. This results in a neutralization of LPS and, therefore, to a reduced production of tumor necrosis factor by MNC. We propose that LBP is not only present as a soluble protein in the serum but may also be incorporated as a transmembrane protein in the cytoplasmic membrane of MNC and that the interaction of LPS with membrane-associated LBP may be an important step in LBP-mediated activation of MNC, whereas LBP-LPS complexation in the serum leads to a neutralization of LPS.