As an assay for endotoxin, the Limulus amebocyte lysate assay has several desirable properties: sensitivity, specificity, and potential for adaptation to a quantitative format. Several modifications have been developed to enhance its potential for clinical application. The modifications that allow quantitative measurement of endotoxin and also improve its application to blood samples are described in this review. In fluids other than blood, the detection of endotoxin with the Limulus amebocyte lysate assay can be used as an aid to identify the presence of gram-negative bacteria, and the assay has established utility. With blood, however, there are a range of factors that interfere with the detection of endotoxemia and there are disparate views with respect to the diagnostic and prognostic significance of the test results. In general, the clinical significance of the finding of endotoxemia broadly parallels the frequency and importance of gram-negative sepsis in the patient groups studied and a decline in endotoxin levels accompanies clinical improvement. However, with therapies designed to reduce levels of endotoxin, or to antagonize its effects, it is unclear whether clinical improvement occurs as a consequence of changes in the levels of endotoxemia.