Toll-like receptors (TLRs) are key innate immune receptors that recognize conserved features of biological molecules that are found in microbes. In particular, TLR2 has been reported to be activated by different kinds of microbial ligands. To advance our understanding of the interaction of TLR2 with its ligands, the recombinant human TLR2 ectodomain (hTLR2ED) was expressed using a baculovirus/insect cell expression system, and its biochemical as well as ligand binding properties were investigated. The hTLR2ED binds synthetic bacterial and mycoplasmal lipopeptides, lipoteichoic acid (LTA) from Staphylococcus aureus, and synthetic lipoarabinomannan precursors from Mycobacterium at extracellular physiological conditions, in the absence of its co-receptors TLR1 and TLR6. We also determined that lipopeptides and glycolipids cannot bind simultaneously to hTLR2ED and that the phosphatidyl inositol mannoside 2 (Pim2) is the minimal lipoarabinomannan structure for binding to hTLR2ED. Binding of hTLR2ED to Pim4, which contains a diacylglycerol group with one of its acyl chain containing 19 carbon atoms, indicates that hTLR2ED can bind ligands with acyl chains longer than 16 carbon atoms. In summary, our data indicate that diacylglycerol is the ligand moiety of microbial glycolipids and lipoproteins that bind to hTLR2ED and that both types of ligands bind to the same binding site of hTLR2ED. The design of novel inhibitors of TLR2, based on their ability to bind to TLR2 but not activate the TLR2 signaling pathway, may lead to the development of novel treatments for septic shock caused by Gram- positive bacteria.