Sepsis resulting from gram-negative bacterial infections is characterized by an excessive inflammatory immune response initiated by exposure of the host innate immune system to either bacteria or bacterial products, primarily lipopolysaccharide (LPS). Engagement of the Toll-like receptor (TLR) 4 on immune cells by LPS induces production of inflammatory mediators, leading to tissue damage. We recently identified a peptide, termed P13, which was previously shown to be a potent inhibitor of in vitro TLR signaling. In this study, we demonstrate that the use of this novel peptide significantly reduces the in vitro production of inflammatory mediators seen after exposure of hepatocytes/nonparenchymal cell cocultures and endothelial cells to LPS. In addition, in vivo treatment of mice with this peptide was effective at inhibiting LPS-induced production of inflammatory mediators and significantly limited liver damage. Peptide treatment significantly increased survival of LPS-/D-galactosamine-treated mice and mice treated with high-dose LPS. These results demonstrated the therapeutic potential of peptide P13 to limit an LPS-induced inflammatory response and enhance survival in murine models of inflammation.