Pulmonary epithelial cells are continuously exposed to microbial challenges as a result of breathing. It is recognized that immune myeloid cells express Toll-like receptors (TLRs), which play a major role in detecting microbes and initiating innate immune responses. In contrast, little is known concerning the expression of TLR in pulmonary epithelial cells per se, their distribution within the cell, their function, and the signaling pathways involved. In this work, we demonstrated by reverse transcription-PCR and/or immunoblot that TLR4 and the accessory molecule MD-2 are constitutively expressed in distinct human alveolar and bronchial epithelial cells. We further characterized by flow cytometry, biotinylation/precipitation, and confocal microscopy the intracellular localization of TLR4 in these cells. Despite this intracellular compartmentalization of TLR4, pulmonary epithelial cells were responsive to the TLR4 activator lipopolysaccharide (LPS), a potent Gram-negative bacteria-associated molecular pattern. Using respiratory epithelial cells isolated from TLR4 knock-out and wild type mice, we demonstrated that TLR4 is the actual activating receptor for LPS in these cells. Furthermore we showed that this cell response to LPS involves a signaling complex including the kinases interleukin-1 receptor-associated kinase (IRAK), p38, Jnk, and ERK1/2. Moreover, using vectors expressing dominant-negative forms of MyD88 and TRAF6, we established that LPS-induced activation of respiratory epithelial cells is largely dependent on TLR4 signaling intermediates. Altogether these data demonstrate that TLR4 is a key element in the response of pulmonary epithelial cells to molecules derived from Gram-negative bacteria. The intracellular localization of TLR4 in lung epithelia is expected to play an important role in the prevention of the development of chronic inflammatory disease.