Many species of marine bacteria elicit a weak immune response. In this study, the aim was to assess the immunomodulatory properties of Gram-negative Pseudoalteromonas strains compared with other marine Gram-negative bacteria and to identify the molecular cause of the immunomodulation. Using murine bone-marrow derived dendritic cells (DCs), it was found that Pseudoalteromonas strains induced low cytokine production and modest up-regulation of surface markers CD40 and CD86 compared with other marine bacteria and Escherichia coli LPS. Two strains, Ps. luteoviolacea and Ps. ruthenica, were further investigated with respect to their immunomodulatory properties in DCs. Both inhibited IL-12 and increased IL-10 production induced by E. coli LPS. LPS isolated from the two Pseudoalteromonas strains had characteristic lipid A bands in SDS-PAGE. Stimulation of HEK293 TLR4/MD2 cells with the isolated LPS confirmed the involvement of LPS and TLR4 and established Pseudoalteromonas LPS as TLR4 antagonists. The isolated LPS was active in the endotoxin limulus amoebocyte lysate assay and capable of inducing increased endocytosis in DCs. This study highlights that antagonistic LPS from Pseudoalteromonas strains has potential as a new candidate of therapeutic agent capable of modulating immune responses.