Lactoferrin (LF), an iron-binding glycoprotein expressed in most biological fluids, represents a major component of mammalian innate immune system. The multiple activities of LF rely not only on its capacity to bind iron but also to interact with molecular and cellular components of both the host and pathogens. LF can bind and sequester lipopolysaccharide thus preventing proinflammatory pathway activation, sepsis, and tissue damage. However, the interplay between LF and lipopolysaccharide is complex and may lead to different outcomes including both the suppression of inflammatory response and immune activation. Understanding the molecular basis and the functional consequences of this complex interaction is critically relevant in the development of LF-based therapeutic interventions in humans.