LPS signals through a membrane bound-complex of the lipid binding protein MD-2 and the receptor TLR4. In this study we identify discrete regions in both MD-2 and TLR4 that are required for signaling by lipid IVa, an LPS derivative that is an agonist in horse but an antagonist in humans. We show that changes in the electrostatic surface potential of both MD-2 and TLR4 are required in order that lipid IVa can induce signaling. In MD-2, replacing horse residues 57-66 and 82-89 with the equivalent human residues confers a level of constitutive activity on horse MD-2, suggesting that conformational switching in this protein is likely to be important in ligand-induced activation of MD-2/TLR4. We identify leucine-rich repeat 14 in the C terminus of TLR4 as essential for lipid IVa activation of MD-2/TLR4. Remarkably, we identify a single residue in the glycan-free flank of the horse TLR4 solenoid that confers the ability to signal in response to lipid IVa. These results suggest a mechanism of signaling that involves crosslinking mediated by both MD-2-receptor and receptor-receptor contacts in a model that shows striking similarities to the recently published structure ( L ipopolysaccharide molecules are complex glycolipids that form the outer layer of the outer membrane of Gramnegative bacteria (1). The lipid A domain of LPS is responsible for cellular activation and consists of a disaccharide to which various substituents, including acyl chains of variable length and number, are attached (2). Escherichia coli lipid A is usually hexa-acylated whereas a tetra-acylated lipid A, lipid IVa, is also produced by E. coli as an intermediate in the lipid A biosynthetic pathway (2). Lipid IVa was originally identified as an inhibitor at the human LPS receptor and was considered a candidate to be developed for clinical use as an endotoxin antagonist. Lipid A signals to host cells through a transmembrane complex consisting of the lipid-binding protein MD-2 and the type 1 receptor TLR4 (1, 3-5). MD-2 is probably the key player in lipid A recognition whereas TLR4, unlike other TLRs, is thought not to participate directly in lipid A binding (5).LPS and lipid A are believed to be recognized by MD-2 following transfer from CD14, which does not participate in the signaling complex (6). Contrary to expectations, ligand binding does not significantly alter the overall structure of MD-2 (7, 8), but the ligands used in the crystallographic studies (lipid IVa and eritoran) are antagonists to human MD-2/TLR4, so it remains unclear what happens to MD-2 and TLR4 upon agonist binding and activation. Active ligands such a lipid A (9) presumably induce structural rearrangements that trigger dimerization of TLR4 and initiate signal transduction (7, 10 -13). Mutagenesis studies identified amino acids 79 -83, 121-124, 125-129 (12), K128, and K132 of human MD-2 as being important in lipid A binding (13), but in the crystal structure of the inactive MD-2-lipid IVa complex, only residues I46, L78, I80, and F121-I124 contact the ligand. The other residues...