Inflammatory response has recently been shown to induce endoplasmic reticulum (ER) stress and the unfolded protein response (UPR), which either recovers proper ER function or activates apoptosis. Here we show that endotoxin (lipopolysaccharide = LPS) can lead to functional ER failure tentatively via a mitochondrion-dependent pathway in livers of rats. Histological examination did not reveal significant damage to liver in form of necroses. Electron microscopy displayed transparent rings appearing around morphologically unchanged mitochondria, which were identified as dilated ER. The spliced mRNA variant of X-box protein-1 (XBP1) and also the mRNA of 78 kDa glucose-regulated protein (GRP78) were up-regulated, both typical markers of ER stress. However, GRP78 was down-regulated at the protein level. A pro-apoptotic shift in the bax/bcl-XL mRNA ratio was not accompanied by translocation of apoptosis inducing factor (AIF) to the nucleus, suggesting that the cells entered a pre-apoptotic state, but apoptosis was not executed. Monooxygenase activity of p450, representing the detoxification system in ER, was decreased after administration of endotoxin. Biochemical analysis of proteins important for ER function revealed the impairment of protein folding, transport, and detoxification suggesting functional ER failure. We suggest that functional ER failure may be a reason for organ dysfunction upon excessive inflammatory response mediated by endotoxin.