Gram-negative septicemia remains one of the most serious forms of hospital-acquired infection. The most consistently virulent component of the gram-negative lipopolysaccharide (endotoxin) appears to be lipid A. Elucidation of the structure-function relationships of lipid A and the biochemical configurations required for endotoxicity makes possible the design of lipopolysaccharide antagonists and/or the production of poly- or monoclonal antibodies that may abrogate the biologic effects of endotoxin. The mechanisms of activity of lipopolysaccharide and the pathophysiologic events it triggers are now better understood than in the recent past. Lipid A triggers the release of mediators such as cachectin (tumor necrosis factor), thereby initiating a cascade of potentially lethal events. Although recent studies indicate no routine role for corticosteroids in gram-negative septic shock or acute respiratory distress syndrome, considerable progress has been made in the development of effective antibiotics. Recent studies of septicemia in neutropenic patients show survival rates significantly higher than those reported more than two decades ago.