Toll-like receptor 2 (TLR2) has been implicated in neutrophil and cardiac dysfunction during sepsis. Here we tested the hypothesis that nonhematopoietic (parenchymal) and hematopoietic TLR2 play distinct roles in sepsis pathogenesis. To achieve this, we generated two groups of chimeric mice with TLR2 deletions either in nonhematopoietic cells (knockout [KO] mice with wild-type [WT] bone marrow [BM]) or in BM cells (WT mice with KO-BM). Polymicrobial sepsis was created by cecal ligation and puncture (CLP). Neutrophil functions, cytokine production, and bacterial clearance were investigated following CLP or sham procedures. Cardiac contractile function was measured in a Langendorff apparatus. Intracellular reactive oxygen species (ROS) were measured using redox-sensitive dye and flow cytometry. Cecal ligation and puncture mice had markedly increased peritoneal neutrophil recruitment compared with the sham-operated mice. Toll-like receptor 2 KO mice, regardless their TLR2 phenotypes (WT vs. KO) in their BM-derived hematopoietic cells, had markedly increased neutrophil migration as well as phagocytosis and reduced cytokine productions compared with TLR2 WT mice following polymicrobial peritonitis. These changes in the chimeric TLR2 KO mice were associated with enhanced blood bacterial clearance and markedly improved cardiac contractile function. Moreover, CLP induced a robust ROS production in the peritoneal leukocytes isolated from WT mice but not from TLR2 KO mice. Taken together, these data indicate that TLR2, particularly that of nonhematopoietic cells, plays a major role in sepsis pathogenesis by impairing neutrophil migratory and phagocytic function, promoting cytokine production, and mediating cardiac contractile dysfunction during polymicrobial sepsis. Toll-like receptor 2 also mediates critical ROS production during polymicrobial sepsis.