CD14 is a glycophosphatidylinositol-linked protein expressed by myeloid cells and also circulates as a plasma protein lacking the glycophosphatidylinositol anchor. Both membrane and soluble CD14 function to enhance activation of cells by lipopolysaccharide (LPS), which we refer to as receptor function. We have previously reported the LPS binding and cell activation functions of a group of five deletion mutants of CD14 (Viriyakosol, S., and Kirkland, T.N. (1995) J. Biol. Chem. 270, 361-368). We have now studied the functional impact of these mutations on soluble CD14. We found that some deletions that abrogated LPS binding in membrane CD14 have no effect on LPS binding in soluble CD14. In fact, some of the soluble CD14 deletion mutants bound LPS with an apparent higher affinity than wild-type CD14. Furthermore, we found that all five deletions essentially ablated soluble CD14 LPS receptor function, whereas only two of the deletions completely destroyed membrane CD14 LPS receptor function. Some of the mutants were able to compete with wild-type CD14 in soluble CD14-dependent assays of cellular activation. We concluded that the soluble and membrane forms of CD14 have different structural determinants for LPS receptor function.