The hypothesis that soluble peptidoglycan (sPGN, a macrophage-activator from Gram-positive bacteria) binds to CD14 (a lipopolysaccharide (LPS) receptor) was tested. sPGN specifically bound to CD14 in the following three assays: binding of soluble 32P-CD14 (sCD14) to agarose-immobilized sPGN, enzyme-linked immunosorbent assay, and photoaffinity cross-linking. sCD14 also specifically bound to agarose-immobilized muramyl dipeptide or GlcNAc-muramyl dipeptide but not to PGN pentapeptide. Binding of sCD14 to both sPGN and ReLPS (where ReLPS is LPS from Salmonella minnesota Re 595) was competitively inhibited by unlabeled sCD14, 1-152 N-terminal fragment of sCD14, sPGN, smooth LPS, ReLPS, lipid A, and lipoteichoic acid but not by dextran, dextran sulfate, heparin, ribitol teichoic acid, or soluble low molecular weight PGN fragments. Binding of sCD14 to sPGN was slower than to ReLPS but of higher affinity (KD = 25 nM versus 41 nM). LPS-binding protein (LBP) increased the binding of sCD14 to sPGN by adding another lower affinity KD and another higher Bmax, but for ReLPS, LBP increased the affinity of binding by yielding two KD with significantly higher affinity (7.1 and 27 nM). LBP also enhanced inhibition of sCD14 binding by LPS, ReLPS, and lipid A. Binding of sCD14 to both sPGN and ReLPS was inhibited by anti-CD14 MEM-18 mAb, but other anti-CD14 mAbs showed differential inhibition, suggesting conformational binding sites on CD14 for sPGN and LPS, that are partially identical and partially different.