Endotoxin, or more accurately termed bacterial lipopolysaccharide (LPS), is recognized as the most potent microbial mediator implicated in the pathogenesis of sepsis and septic shock. Yet despite its discovery well over a century ago, the fundamental role of circulating endotoxin in the blood of most patients with septic shock remains enigmatic and a subject of considerable controversy. LPS is the most prominent ‘alarm molecule’ sensed by the host’s early warning system of innate immunity presaging the threat of invasion of the internal milieu by Gram-negative bacterial pathogens. In small doses within a localized tissue space, LPS signaling is advantageous to the host in orchestrating an appropriate antimicrobial defense and bacterial clearance mechanisms. Conversely, the sudden release of large quantities of LPS into the bloodstream is clearly deleterious to the host, initiating the release of a dysregulated and potentially lethal array of inflammatory mediators and procoagulant factors in the systemic circulation. The massive host response to this single bacterial pattern recognition molecule is sufficient to generate diffuse endothelial injury, tissue hypoperfusion, disseminated intravascular coagulation and refractory shock. Numerous attempts to block endotoxin activity in clinical trials with septic patients have met with inconsistent and largely negative results. Yet the groundbreaking discoveries within the past decade into the precise molecular basis for LPS-mediated cellular activation and tissue injury has rekindled optimism that a new generation of therapies that specifically disrupt LPS signaling might succeed. Other microbial mediators found in Gram-positive bacterial and viral and fungal pathogens are now appreciated to activate many of the same host defense networks induced by LPS. This information is providing novel interventions in the continuing effots to improve the care of septic patients.