Background. Bactericidal permeability increasing protein (BPI), Limulus anti-lipopolysaccharide factor (LALF), and lipopolysaccharide binding protein (LBP) are three distinct proteins that bind to lipopolysaccharide (LPS). Intriguingly, binding of BPI and LALF to LPS results in neutralization of LPS activity, whereas the binding of LBP to LPS creates a complex that results in augmentation of LPS activity. Despite their different effector functions, we hypothesized that peptides based on the sequences of the proposed LPS-binding motif from each protein would neutralize LPS in vitro. Methods. Three peptide sequences, each 27 amino acids in length, of the proposed LPS-binding motif of BPI (BG38), LALF (BG42), and LBP (BG43) were synthesized. These peptides were then tested for their: (1) ability to inhibit macrophage secretion of TNF-α after stimulation by LPS derived from Escherichia coli, Klebsiella pneumoniae, Pseudomonas aeruginosa, and Serratia marcescens; and (2) bactericidal activity against these same four gram-negative bacteria in vitro. Results. Synthetic peptides BG38 (BPI-derived), BG42 (LALF-derived), and BG43 (LBP-derived) but not control peptide significantly inhibited LPS-induced tumor necrosis factor-α secretion by macrophages and mediated the lysis of gram-negative bacteria in vitro. In addition, preincubation of LPS with peptide BG38 mediated complete protection subsequent to lethal endotoxin challenge. Conclusions. These data demonstrate that small peptides derived from BPI, LALF, and LBP retained significant endotoxin-netralizing and bactericidal activity against many different gram-negative bacteria in vitro. Identification of this conserved LPS-binding region within each protein may aid in the development of new immunomodulatory reagents for use as adjuvant therapy in the treatment of gram-negative bacterial sepsis.