Bacterial infections play an important role in the multifactorial etiology of rheumatoid arthritis. The arthropathic properties of Gram-positive bacteria have been associated with peptidoglycan-polysaccharide complexes (PG-PS), which are major structural components of bacterial cell walls. There is little agreement as to the identity of cellular receptors that mediate innate immune responses to PG-PS. A glycosylphosphatidylinositol-linked cell surface protein, CD14, the lipopolysaccharide receptor, has been proposed as a PG-PS receptor, but contradictory data have been reported. Here, we examined the inflammatory and pathogenic responses to PG-PS in CD14 knockout mice in order to examine the role for CD14 in PG-PS-induced signaling. We found that PG-PS-induced responses in vitro, including transient increase in intracellular calcium, activation of nuclear factor-kappaB, and secretion of the cytokines tumor necrosis factor-alpha and interleukin-6, were all strongly inhibited in CD14 knockout macrophages. In vivo, the incidence and severity of PG-PS induced acute polyarthritis were significantly reduced in CD14 knockout mice as compared with their wild-type counterparts. Consistent with these findings, CD14 knockout mice had significantly inhibited inflammatory cell infiltration and synovial hyperplasia, and reduced expression of inflammatory cytokines in PG-PS arthritic joints. These results support an essential role for CD14 in the innate immune responses to PG-PS and indicate an important role for CD14 in PG-PS induced arthropathy.