The cellular signaling events leading to the systemic inflammatory response syndrome and sepsis in monocytes/macrophages activated by lipopolysaccharide (LPS) are well understood. LPS is a glycolipid component of Gram-negative bacterial cell wall. It exerts its effect through the lipid A moiety. LPS binds to monocytes/macrophages via a membrane-bound receptor, CD14, an interaction which is optimized in the presence of plasma factors, LPS-binding protein, and septin. Although LPS is known to bind to other receptors, the roles of these receptors in transmembrane signaling and activation of monocytes/macrophages are not as well understood as is that of the CD14 receptor. Intracellular events in response to LPS stimulation are mediated by phospholipase (PL) C, protein kinases, PLA2, and PLD. Activation of PLC by LPS results in the release of diacylglycerol and inositol 1,4,5-trisphosphate. The former mediates the stimulation of protein kinase C, and the latter induces an increase in intracellular calcium concentration. LPS stimulation of monocytes/macrophages also results in the phosphorylation and activation of several protein kinases, including protein tyrosine kinases which mediate cytokine production, and mitogen-activated protein kinase which activates cytosolic PLA2 to release arachidonate. LPS also plays a role in cellular proliferation and differentiation. Upregulation of the secretory form of PLA2 has also been documented in response to LPS. PLD is stimulated by LPS to release phosphatidic acid (PA). PA can activate the respiratory burst by increasing diacylglycerol production and by modulating the effects of guanine nucleotide-binding proteins. Therapeutic strategies to decrease the clinical effects of sepsis would logically include agents which block at initial receptor-ligand interaction, as well as those which attenuate the intracellular events that follow LPS stimulation. Early in vivo studies are promising, but clearly much work remains to be done.