Lipopolysaccharide (LPS), an outer-membrane component of Gram-negative bacteria, interacts with LPS-binding protein and CD14, which present LPS to toll-like receptor 4 (refs , ), which activates inflammatory gene expression through nuclear factor κB (NFκB) and mitogen-activated protein-kinase signalling^,. Antibacterial defence involves activation of neutrophils that generate reactive oxygen species capable of killing bacteria; therefore host lipid peroxidation occurs, initiated by enzymes such as NADPH oxidase and myeloperoxidase. Oxidized phospholipids are pro-inflammatory agonists promoting chronic inflammation in atherosclerosis; however, recent data suggest that they can inhibit expression of inflammatory adhesion molecules. Here we show that oxidized phospholipids inhibit LPS-induced but not tumour-necrosis factor-α-induced or interleukin-1β-induced NFκB-mediated upregulation of inflammatory genes, by blocking the interaction of LPS with LPS-binding protein and CD14. Moreover, in LPS-injected mice, oxidized phospholipids inhibited inflammation and protected mice from lethal endotoxin shock. Thus, in severe Gram-negative bacterial infection, endogenously formed oxidized phospholipids may function as a negative feedback to blunt innate immune responses. Furthermore, identified chemical structures capable of inhibiting the effects of endotoxins such as LPS could be used for the development of new drugs for treatment of sepsis.