Low endotoxin recovery (LER) is a recently discovered phenomenon describing the inability of limulus amebocyte lysate (LAL)-based assays to detect lipopolysaccharide (LPS) because of a “masking effect” caused by chelators or detergents commonly used in buffer formulations for medical products and recombinant proteins. This study investigates the masking capacities of different buffer formulations and whether masked endotoxin is biologically active. We show that both naturally occurring endotoxin as well as control standard endotoxin can be affected by LER. Furthermore, whereas masked endotoxin cannot be detected in Factor C based assays, it is still detectable in a cell-based TLR4-NF-κB-luciferase reporter gene assay. Moreover, in primary human monocytes, masked LPS induces the expression of pro-inflammatory cytokines and surface activation markers even at very low concentrations. We therefore conclude that masked LPS is a potent trigger of immune responses, which emphasizes the potential danger of masked LPS, as it may pose a health threat in pharmaceutical products or compromise experimental results.