Lipopolysaccharide (LPS) as a major component of the outer membrane of gram-negative bacteria stimulates various cells to initiate a signalling cascade which ultimately leads to cell activation and expression of immunoregulatory or inflammatory cytokines. The human respiratory epithelium is an important environmental interface, but differences in LPS-induced cell activation between bronchial and alveolar epithelial cells have not yet been investigated in detail. First, the expression of Toll-like receptors (TLRs), as pattern-recognition receptors, was investigated for the bronchial epithelial cells and type II-like pneumocytes, demonstrating that they fulfil the prerequisites for LPS signalling. Thereafter, the effects of LPS, soluble CD14 (sCD14) and LPS-binding protein (LBP) on the release of interleukin-6 (IL-6) and IL-8 were studied. In the presence of LPS, sCD14 induced a significant and concentration-dependent cytokine release in type II-like pneumocytes, whereas the response of bronchial epithelial cells to sCD14 stimulation was low, implicating sCD14-independent activation mechanisms. Furthermore, LBP revealed inhibitory effects on the activation of alveolar epithelial cells, which may represent a novel local defence mechanism during gram-negative infection. We conclude that distinct pathways exist for LPS-induced activation of bronchial and alveolar epithelial cells.