Lipopolysaccharide (LPS), which is produced by Gram-negative bacteria, is a powerful activator of innate immune responses. LPS binds to the proteins Toll-like receptor 4 (TLR4) and MD2 to activate pro-inflammatory signalling pathways. The TLR4–MD2 receptor complex is crucial for the host recognition of Gram-negative bacterial infection, and pathogens have devised many strategies to evade or manipulate TLR4–MD2 activity. The TLR4–MD2 signalling pathway is therefore potentially an important therapeutic target. This Progress article focuses on recent exciting data that have revealed the structural basis of TLR4–MD2 recognition of LPS.