Endotoxin, also referred to as lipopolysaccharide (LPS), can stimulate localized or systemic inflammation via the activation of pattern recognition receptors. Additionally, endotoxin and inflammation can regulate intestinal epithelial function by altering integrity, nutrient transport, and utilization. The gastrointestinal tract is a large reservoir of both gram-positive and gram-negative bacteria, of which the gram-negative bacteria serve as a source of endotoxin. Luminal endotoxin can enter circulation via two routes: 1) nonspecific paracellular transport through epithelial cell tight junctions, and 2) transcellular transport through lipid raft membrane domains involving receptor-mediated endocytosis. Paracellular transport of endotoxin occurs through dissociation of tight junction protein complexes resulting in reduced intestinal barrier integrity, which can be a result of enteric disease, inflammation, or environmental and metabolic stress. Transcellular transport, via specialized membrane regions rich in glycolipids, sphingolipids, cholesterol, and saturated fatty acids, is a result of raft recruitment of endotoxin-related signaling proteins leading to endotoxin signaling and endocytosis. Both transport routes and sensitivity to endotoxin may be altered by diet and environmental and metabolic stresses. Intestinal-derived endotoxin and inflammation result in suppressed appetite, activation of the immune system, and partitioning of energy and nutrients away from growth toward supporting the immune system requirements. In livestock, this leads to the suppression of growth, particularly suppression of lean tissue accretion. In this paper, we summarize the evidence that intestinal transport of endotoxin and the subsequent inflammation leads to decrease in the production performance of agricultural animals and we present an overview of endotoxin detoxification mechanisms in livestock.