Background: Limulus anti-lipopolysaccharide (LPS) factor (LALF) is a 102-amino acid LPS-binding protein from the horseshoe crab, Limulus Polyphemus. The peptide includes the LPS-binding domain of holoLALF, yet it lacks the loop structure stabilized by disulfide or other covalent bonds that is a common motif in the LPS-binding regions of holoLALF and several other LPS-binding proteins. Although it neutralizes LPS and is bactericidal against Pseudomonas aeruginosa, the LALF 28-54 portion of LALF is not protective in a murine model of intraperitoneal sepsis compared with holoLALF. We examined the effects of cyclizing this linear peptide to determine if this action would recapitulate the stable loop-type structure and enhance its LPS-neutralization and bactericidal activity in vitro. Methods: Cyclic LALF 28-54 was produced by oxidizing linear LALF 28-54. Each peptide, along with appropriate controls, was assayed for LPS neutralization using the chromogenic Limulus amebocyte lysate (LAL) assay and a bioassay to measure inhibition of LPS-stimulated production of tumor necrosis factor-alpha (TNF-α) by murine macrophages. Bactericidal activity against Pseudomonas aeruginosa was also assessed. Data were analyzed using a two-tailed Student t-test. Results: Polymyxin B and holoLALF exhibited potent endotoxin antagonism in both assays, as well as bactericidal activity. Concordant with prior studies, the linear form of LALF 28-54 exhibited either similar or a slightly lesser degree of activity in all assays. However, cyclization was associated with significantly diminished endotoxin neutralization in both assays (p < 0.05) and decreased bactericidal activity (p < 0.05) compared with linear LALF 28-54. Conclusions: Whereas a synthetic linear peptide based on the endotoxin-binding region of holoLALF retained activity, cyclization was associated with a diminution in potency in vitro. We postulate that cyclization does not constrain the peptide in a manner that recreates the loop structure necessary for potent endotoxin antagonism.