Neutralization and sequestration of bacterial lipopolysaccharide which plays a key role in gram-negative sepsis is required to block the progression of sepsis at early stages in addition to destroying bacteria. Many of the host defense peptides which have antimicrobial activity are also able to bind to and neutralize LPS, however, these two activities do not necessarily correlate. Due to its toxicity application of polymyxin B as the prototype of LPS neutralizing peptide is limited to topical applications and extracorporeal removal of endotoxin. Development of novel endotoxin neutralizing peptides without the toxicity of polymyxin B have been based on the natural host defense peptides, fragments of LPS binding proteins and engineered peptides. Neutralization of LPS can be achieved through several different peptide fold motifs, which are reviewed in this article. Endogenous host defense peptides, fragments of endotoxin-binding proteins and synthetic anti-endotoxin peptides fold into alpha-helical, beta-hairpin, extended and compact conformations without regular secondary structure. In animal models many of the peptides have demonstrated good in vitro and in vivo endotoxin neutralizing activity but up to now none of the peptides has been approved for clinical application with an anti-endotoxin indication. Recent developments include preparation of novel types of endotoxin neutralizing compounds such as peptides modified by lipophilic moieties and non-peptidic molecules, particularly lipopolyamines and on the other hand additional medical applications such as extracorporeal endotoxin removal, targeting to inflammation sites or endotoxoid based vaccines.