The basic mechanisms by which bacterial lipopolysaccharides (LPS) interact with cells and tissues of the endotoxin sensitive host have been examined within the context of defining critical targets for the manifestation of the multiple pathophysiologic effects of this potent bacterial toxin. Evidence has been presented to suggest that metabolic processing of bacteria by phagocytic cells can result in the release of biologically active endotoxin. The available experimental data would indicate that, in the mouse, a bone marrow derived radiosensitive cell is responsible for the toxic effects of endotoxin. The precise mechanism by which lipopolysaccharides interact with these cells remains to be elucidated. Although interaction with critical targets on the membrane of LPS responsive cells is established, the evidence for specific endotoxin receptor molecules is weak and still controversial. Recent data suggest that, if such endotoxin receptors do, in fact exist, they are at best only weakly immunogenic. The use of the C3H/HeJ "endotoxin unresponsive" mouse strain, however, remains as an extremely useful experimental model to define the mode of action of endotoxin at the molecular level.