Lipopolysaccharide(LPS) can induce cell inflammation through interacting with TLR4. Recent studies have revealed that MD-2 participate in the process of LPS induced signal transduction pathway by forming a complex with TLR4. After binding to the MD-2 of the TLR4/MD-2 complex, LPS can induce TLR4- oligomerization and activate the downstream signal pathway. After being synthesized, most MD-2 can bind to TLR4 at the endoplasmic reticulum /Golgi apparatus and expresse as TLR4/MD-2 complex at the cellular surface. Therefore MD-2 not only can regulate the distribution of TLR4 in the cytoplasm, but also help TLR4 to recognize LPS. Another part of MD-2 can be released into plasma as soluble MD-2(sMD-2). With the help of CD14, sMD-2 would interact with LPS in the plasma to constitute LPS-sMD-2 complex, helping cell who express only TLR4, to recognize LPS, however excessive expressed sMD-2 would repress the LPS signal transduction pathway. In conclusion, MD-2 plays a crucially modulating role in the process of TLR4 mediated endotoxin recognition and signal transduction.