Lipopolysaccharide, the endotoxin of Gram-negative bacteria, induces extensive immune responses that can lead to fatal septic shock syndrome. The core receptors recognizing lipopolysaccharide are CD14, TLR4, and MD-2. CD14 binds to lipopolysaccharide and presents it to the TLR4/MD-2 complex, which initiates intracellular signaling. In addition to lipopolysaccharide, CD14 is capable of recognizing a few other microbial and cellular products. Here, we present the first crystal structure of CD14 to 2.5 angstroms resolution. A large hydrophobic pocket was found on the NH2-terminal side of the horseshoe-like structure. Previously identified regions involved in lipopolysaccharide binding map to the rim and bottom of the pocket indicating that the pocket is the main component of the lipopolysaccharide-binding site. Mutations that interfere with lipopolysaccharide signaling but not with lipopolysaccharide binding are also clustered in a separate area near the pocket. Ligand diversity of CD14 could be explained by the generous size of the pocket, the considerable flexibility of the rim of the pocket, and the multiplicity of grooves available for ligand binding.