Antimicrobial peptides (AMPs) exhibit a wide spectrum of actions, ranging from a direct bactericidal effect to multifunctional activities as immune effector molecules. The aim of this study was to examine the anti-inflammatory properties of a DAL-PEG-DK5 conjugate composed of a lysine-rich derivative of amphibian temporin-1CEb (DK5) and dalargin (DAL), the synthetic Leu-enkephalin analogue. Detailed study of the endotoxin-neutralizing activity of the peptide revealed that DAL-PEG-DK5 interacts with LPS and the LPS binding protein (LBP). Moreover, DAL-PEG-DK5 prevented dimerization of TLR4 at the macrophage surface upon LPS stimulation. This inhibited activation of the NF-κB signaling pathway and markedly reduced pro-inflammatory cytokine production. Finally, we showed that aggregation of DAL-PEG-DK5 into amyloid-like structures induced by LPS neutralized the endotoxin proinflammatory activity. Consequently, DAL-PEG-DK5 reduced morbidity and mortality in vivo, in a mouse model of endotoxin-induced septic shock. Collectively, the data suggest that DAL-PEG-DK5 is a promising therapeutic compound for sepsis.