CD14 is a 55-kDa glycoprotein which binds lipopolysaccharide (LPS) and enables LPS-dependent responses in a variety of cells. In order to identify the domains in CD14 required for function, we deleted increasing amounts of CD14 from the C terminus. Truncated CD14 cDNA sequences were transfected into COS-7 cells and serum-free conditioned medium was analyzed for mutant CD14 expression and bioactivity. Mutant CD14s containing as few as 152 amino acids were found to have activity equivalent to full-length sCD14. To further characterize the mutant CD14, we constructed a stable Chinese hamster ovary cell line expressing sCD14(1-152) and purified the protein to homogeneity. sCD14(1-152) bound radioactive LPS, enabled U373 cells to synthesize interleukin 6 in response to LPS, and enabled human neutrophils to respond to smooth LPS. In all of these assays, the behavior of sCD14(1-152) was quantitatively similar to full-length sCD14. We also found that two neutralizing anti-CD14 antibodies (3C10 and MEM-18) bound and neutralized sCD14(1-152). We conclude from these experiments that the N-terminal 152 amino acids of CD14 are sufficient to bind LPS and confer essentially wild-type bioactivity in vitro.